9-3. (Cost of equity) In early 2016, Alfa Corporation issued new common stock at a market price of $30. Dividends last year were $2.00 and are expected to grow at an annual rate of 3 percent forever. Floatation costs will be 4 percent of market price. What is Alfas cost of equity for the new issue?

9-4. (Cost of debt) LLC International is issuing a $2,000 par value bond that pays 8 percent annual interest and matures in 10 years. Investors are willing to pay $1,800 for the bond. Floatation costs will be 4 percent of market value. The Company is in a 20 percent tax bracket. What will be the firms after-tax cost of debt on the bond?

9-5. (Cost of preferred stock) The preferred stock of LLC International sells for $35 and pays 5 percent dividends. The net price of the stock is $30. What is the cost of capital for the preferred stock?