Compute the cost for the following sources of financing:

a. A $100 par value bond with a market price of $97 and a coupon interest rate of 10%. Costs for a new issue would be approximately 5%. The bonds mature in ten years and the corporate tax rate is 30%. Estimate the cost of debt before tax.

b. Preference shares selling for $10 with an annual unfranked dividend payment of $0.80. If the company sells a new issue the cost will be $0.90 per share.

c. Internally generated equity totalling $4.8 million. The price of ordinary shares is $7.50 per share, and the dividends per share were $0.98 last year. These dividends are not expected to increase, nor to be franked.

d. New ordinary shares where the most recent dividend was $0.28. The company's dividends per share should continue to increase at an 8% growth rate into the indefinite future. The market price of the shares is currently $5.30; however, issue costs of $0.60 per share are expected if the new shares are issued. Estimate the after-tax cost of ordinary shares, assuming that the dividends are not franked.