Question
Bonds: builtrite is planning on offering a $1000 par value, 20 year, 5% coupon bond with an expected selling price of $1025. flotation costs would
Bonds: builtrite is planning on offering a $1000 par value, 20 year, 5% coupon bond with an expected selling price of $1025. flotation costs would be $55 per bond. preferred stock: builtire could sell a $46 par value preferred with an 5% coupon for $38 a share. flotation costs would be $4 a share. common stock: currently, the stock is selling for $62 a share and has paid a $3.82 dividend. dividends are expected to continue growing at 10%. flotation costs would be $3.75 a share and builtrite has $350,000 in available retained earnings. assume a 30% tax bracket. their after-tax cost of debt is: Multiple choice: 4.15% 6.13% 3.68% 6.80%
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