False 27-30 OOOOO SUN company is considering several funding alternatives for an investment project. To finance the project, the company can sell 1,000 20-year bonds with a $1,000 face value, 10% coupon rate. The bonds require an average discount of $50 per bond and flotation costs of $30 per bond when being sold. The company can also sell 5,000 preferred stocks that will pay a $5 dividend per share at a price of $50 per share. The cost of issuing and selling preferred stocks is expected to be $5 per share. To calculate the cost of common stock, the company uses the dividend discount model. The firm just paid a dividend of $0.50 per common share. The company expects this dividend to grow at a constant rate of 10% per year indefinitely. The flotation costs for issuing new common shares of stock are 10%. The company plans to sell 5,000 shares at a price of $50 per share. The company's tax rate is 40%. The company's after-tax cost of long-term debt is 10% A True B False The Company's cost of preferred stock is 10.11% A True B False The company's cost of common stock is 12.22% A True 28-30 29-30 D Tolag