(10 points) Davenport Inc has a target capital structure of 30 debt, 10 of preferred stock, and 60 of common equity The current price of the firm's 8 coupon, semiannual payment, non callable bonds with 10 years remaining maturity is $1150 New bonds would be privately placed with no flotation cost The current price of the firm's 8 , $100 par value, quarterly dividend, perpetual preferred stock is $90 The firm would incur flotation cost equal to 4 of the proceeds on a new issue of preferred stock The firm's cost of common equity is estimated to be 12 The corporate tax rate is 40 a What is the the firm's before tax cost of debt financing b What is the firm's cost of preferred stock financing c What is the firm's WACC

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(10 points) Davenport Inc  has a target capital structure of 30  debt, 10  of preferred stock, and 60  of common equity  The current price of the firm's 8  coupon, semiannual payment, non callable bonds with 10 years remaining maturity is $1150  New bonds would be privately placed with no flotation cost  The current price of the firm's 8 , $100 par value, quarterly dividend, perpetual preferred stock is $90  The firm would incur flotation cost equal to 4  of the proceeds on a new issue of preferred stock  The firm's cost of common equity is estimated to be 12   The corporate tax rate is 40   a  What is the the firm's before tax cost of debt financing  b  What is the firm's cost of preferred stock financing  c  What is the firm's WACC

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(10 points) Davenport Inc. has a target capital structure of 30% debt, 10% of preferred stock, and 60% of common equity. The current price of

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