A$ 1 000 par value bond with a market price of

$ 970 and a coupon interest rate of

11 percent. Flotation costs for a new issue would be approximately 9percent. The bonds mature in

12 years and the corporate tax rate is

34percent. B. A preferred stock selling for

$ 116 with an annual dividend payment of

$ 11. The flotation cost will be

$ 5 per share. The company's marginal tax rate is 30 percent. C Retained earnings totalling $ 4.8 million. The price of the common stock is

$ 75 per share, and dividend per share was

$ 8.44 last year. The dividend is not expected to change in the future. D. New common stock for which the most recent dividend was

$ 3.15. The company's dividends per share should continue to increase at a growth rate of

8 percent into the indefinite future. The market price of the stock is currently

$ 49 however, flotation costs of

$ 9 per share are expected if the new stock is issued.

Question content area bottom

Part 1

a. What is the firm's after-tax cost of debt on the bond?

enter your response here

%

(Round to two decimal places.)

ANSWERS A,B,C,D

il comportamento LASEO onderwent on the y the corpore Arhiv 11. hehehe The proper d. Newcom www5315 The compare What is the condition abond Help me solve this View example Get more help caure -Pro MacBook Air 3 224 od 2 E &: 18 10 is - $ 4 % 5 3 6 & 7 8 3 0 #t 9 delete W E R T { Y U - O S D F G H j K L V V ? B Z M A. - * 36 2 ommand command option Homework: Chapter 9 Homework Question 6, Problem 9-11 (similar to) Part 1 of 4 HW Score: 31.58%, 6 of 19 points O Points: 0 of 4 Save Individual or component costs of capital) Compute the costs for the following sources of financing a. A $1,000 par value bond with a market price of $970 and a coupon interest rate of 11 percent. Flotation costs for a new issue would be approximately percent. The bonds mature in 12 years and the corporate tax rate is 34 percent b. A preferred stock selling for $116 with an annual dividend payment of $11. The flotation cost will be $5 per share. The company's marginal tax rate is 30 percent c. Retained oamings totaling $4.8 million. The price of the common stock is $75 per share, and dividend per share was $8.44 last year. The dividend is not expected to change in the future d. New common stock for which the most recent dividend was $3.15. The company's dividends per share should continue to increase at a growth rate of