#5 & #19

35 percent bracket. What is its aftertax cost of debt? 5. Calculate the aftertax cost of debt under each of the following conditions. Yield Corporate Tax Rate a. 6.0% 16% b. 35 C. 24 12.6 9.4 If the flotation cost is $1.50, compute the cost of new common 19. United Business Forms' capital structure is as follows: Debt 35% ****** Preferred stock 15 Common equity 50 The aftertax cost of debt is 7 percent, the cost of preferred stock is 10 percent, and the cost of common equity (in the form of retained earnings) is 13 percent. Calculate United Business Forms' weighted average cost of capital in a manner similar to Table 11-1 on page 332. motive to the canital structure shown in Problem 19 for United 2 Weighted average cost of capital (LOI) Weighted average vital