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Coleman Technologies is currently calculating the cost of capital for a major expansion program. We have the following information regarding the program: - The tax

Coleman Technologies is currently calculating the cost of capital for a major expansion program. We have the following information regarding the program: - The tax rate for the duration of the program is 40%(ie. T=40)- New 15-year coupon bonds will be issued - Similar 15-year, $ 1,000 par value, 12% coupon, semiannual noncallable bonds currently sell for $ 1,153.72- New bonds will be privately placed with no flotation cost - New preferred stock will be issued - Similar 10%, $ 100 par value, quarterly dividend, perpetual preferred stock currently sells for $ 111.10- Common stock sells for $ 50(. ie. P_0=50)-D_0=4.19 and g=.05-\beta =1.2, r_f=.07, and M R P=.06- Bond-Yield Risk Premium =,04- The target capital structure is 30% debt, 10% preferred, and 60% common equity 1. What is the cost of debt for Coleman Technologies?

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