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(12 points) Compute the costs for the following sources of financing: a. A $1,000par value bond with a market price of $970 and a coupon

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(12 points) Compute the costs for the following sources of financing: a. A $1,000par value bond with a market price of $970 and a coupon interest rate of 10 1. percent. Flotation costs for a new issue would be approximately 6 percent of market price. The bond matures in 8 years, and the marginal corporate tax rate is 35 percent b. A preferred stock selling for $100 with an annual dividend payment of $8. The flotation cost will be $10 per share. The company's marginal tax rate is 30 percent. c. Retained earnings total S4.8 million. The price of the common stock is $75 per share, and dividend per share was $9.8 last year. The dividend is not expected to change in the future. d. New common stock for which the most recent dividend was $3.2. The company's dividends per share should continue to increase at a 9 percent growth into the indefinite future. The market price of the stock is currently $60; however, flotation costs of $6 per share are expected if the new stock is issued

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