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1. Pure Michigan issued bonds with the following features: - Maturity: 10 years - Coupon rate 5.0% per annum but paid semi-annually. - Par Value:
1. Pure Michigan issued bonds with the following features: - Maturity: 10 years - Coupon rate 5.0% per annum but paid semi-annually. - Par Value: $1,000 - Each bond was sold today for $925.61 but had to pay 2.0% flotation expenses. - A total of 3,241 bonds are outstanding. What is the BEFORE-TAX Cost of DEBT? [Make sure to annualize the rate] Use Financial Calculator. 2. Pure Michigan also issued the following Preferred Stock: - Coupon rate 3.0% per annum and paid annually. - Par Value: $100 - Each preferred was sold at $76.50 but had to pay 2.00% flotation expenses. - A total of 13,072 Preferred Stocks are outstanding. What is the Cost of Preferred Stock
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