c. The company can issue $1,65 dividend preferred stock for a market price of $26 per share. Flotation costs would amount to SA per share. What is the cost of prefermed stock financing? d. The company can issue $1,000-par-value, 10% coupon, 9-year bonds that can be sold for $1.240 each, Flotation costs would amount to $20 per bond. Use the estimation formula to figure the approximate after-tax cost of debt financing? e. What is the WACC? a. I the market price of the common stock is $44 and dividends are expected to grow at a rate of 8% per year for the foreseeable future, the company's cost of retained earnings financing is 10.92 %. (Round to two decimal places.) b. I underpricing and flotation costs on new shares of common stock amount to $0 per share, the company's cost of new common stock financing as 11.87% (Round to two decimal places.) c. If the company can issue $1.65 dividend preferred stock for a market price of $25 per share, and Rotation costs would amount to St per share the cout of praterred stock financing is %. (Round to two decimal places.) Question Help Cost of capital Edna Recording Studios, Inc., reported earnings available to common stock of $4,600,000 last year. From those earnings, the company paid a dividend of $1.19 on each of its 1,000,000 common shares outstanding. The capital structure of the company includes 45% debt, 15% preferred stock, and 40% common stock Is taxed at a rate of 25% a. If the market price of the common stock is $44 and dividends are expected to grow at a rate of 8% per year for the foreseeable future, what is the company's cost or retained earnings financing? b. If underpricing and flotation costs on new shares of common stock amount to $9 per share, what is the company's cost of new common stock Mancing? c. The company can issue $1.65 dividend preferred stock for a market price of $26 per share. Flotation costs would amount to $4 per share. What is the cost of preferred stock financing? d. The company can issue $1,000-par-value, 10% coupon, 9-year bonds that can be sold for $1.240 each. Flotation costs would amount to $20 per bond Use the estimation formula to figure the approximate after-tax cost of debt financing? e. What is the WACC? a. If the market price of the common stock is $44 and dividends are expected to grow at a rate of 8% per year for the foreseeable future, the company's cost of retained earnings financing is 10.92 % (Round to two decimal places.) b. I underpricing and flotation costs on new shares of common stock amount to $9 per share, the company's cost of raw common stock francing is 187% (Round to two decimal places.) c. If the company can issue $1.65 dividend preferred stock for a market price of $26 per share, and flotation costs would amount to St per share the cost of preferred stock financing is % (Round to two decimal places.)
