Answer question 9-4 only

spring of 2015, the Brille Corporation was involved in issu- 9-3. (Cost of equity) In the ing new common stock at a market price of $35. Dividends last year were $1.50 and are expected to grow at an annual rate of 5 percent forever. Flotation costs will be 6 percent of market price. What is Brille's cost of equity for the new issue? 9-4. (Cost of debt) Carraway Seed Company is issuing a $1,000 par value bond that pays 7 percent annual interest and matures in 15 years. Investors $850 for the bond. Flotation costs will be 3 percent of market value. The company is in a 30 percent marginal tax bracket. What will be the firm's after-tax cost of debt on the bond? are willing to pay