Bonds Builtrite is planning on offering a $1000 par value, 20 year, 7 coupon bond with an expected selling price of $1025 Flotation costs would be $55 per bond Preferred Stock Builtrite could sell a S46 par value preferred with a 7 coupon for $38 a share Flotation costs would be 58 a share Common stock Currently, the stock is selling for $62 a share and has paid a $5 82 dividend Dividends are expected to continue growing at 12 Flotation costs would be $3 75 a share and Builtrite has $350,000 in available retained earnings Assume a 40 tax bracket Their after tax cost of internal common (retained earnings) is 23 26 22 51 22 06 21 76

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Bonds  Builtrite is planning on offering a $1000 par value, 20 year, 7  coupon bond with an expected selling price of $1025  Flotation costs would be $55 per bond  Preferred Stock Builtrite could sell a S46 par value preferred with a 7  coupon for $38 a share  Flotation costs would be 58 a share Common stock  Currently, the stock is selling for $62 a share and has paid a $5 82 dividend  Dividends are expected to continue growing at 12   Flotation costs would be $3 75 a share and Builtrite has $350,000 in available retained earnings Assume a 40  tax bracket Their after tax cost of internal common (retained earnings) is  23 26  22 51  22 06  21 76

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Bonds: Builtrite is planning on offering a $1000 par value, 20 year, 7% coupon bond with an

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International Marketing And Export Management

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International Marketing And Export Management

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