Help Center ? 2 D Question 17 2.5 pts ncements es S Ees Use the following information to answers 17 CDE Inc.'s current and optimal) capital structure is 40% debt, 10% preferred stock, and 50% common equity, CDE is in the 40% tax bracket. The company can issue up to $20,000,000 in new bonds at par with a 7% coupon rate; any subscquent amount must carry a 2% premium to compensate investors for added risk. A new issue of preferred stock would pay an annual dividend of $3.5and be priced to net the company $60 per share after the $3.00 per share floatation cost. The firm has $21,000,000 in change in retained earnings for the current period. CDE's common stock trades at $40.00 per share and the expected dividend on the common stock at ty is 2.00. Floatation costs on a new common stock issue is $5.00 per share. The company is growing at 7% per year. n pto Video What is the cost of preferred stock? Put the answer as a percentage with two decimals. If the answer is 6.85%, enter 6.85 D Question 18 2.5 pts : 118 888 30 $ 4 % 5 & 7 3 2 6 8 9 2 W E R T Y U S D F G H . J K