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What is the after-tax cost of debt to mount one

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a. The Mount One Company has consulted with its investment bankers and determined that they could issue new debt with a yield of 8%. If Mount One's marginal tax rate is 39%, what is the after-tax cost of debt to Mount One?

b. Mamacarie preferred stock yields new investors 9%. Flotation costs are 11%. What is the cost of preferred stock to Mamacarie?

c. The Bayblade Company has common stock outstanding that has a current price of RM20 per share and a RM0.5 dividend. Bayblade's dividends are expected to grow at a rate of 3% per year, forever. What is the cost of new equity to Bayblade?

Reference no: EM132594687

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