$($Individual or component costs of capital$)$ Compute the cost of the following:

a$.$ A bond that has $$1,000$ par value $($face value$)$ and a contract or coupon interest rate of $11$ percent. A new issue would have a floatation cost of $6$ percent of the $$1,110$ market value. The bonds mature in $9$ years. The firm's average tax rate is $30$ percent and its marginal tax rate is $24$ percent.

b$.$ A new common stock issue that paid a $$1\mathrm{.}70$ dividend last year. The par value of the stock is $$15,$ and earnings per share have grown at a rate of $9$ percent per year. This growth rate is expected to continue into the foreseeable future. The company maintains a constant dividend$-$earnings ratio of $30$ percent. The price of this stock is now $$25,$ but $7$ percent flotation costs are anticipated.

c$.$ Internal common equity when the current market price of the common stock is $$45.$ The expected dividend this coming year should be $$3\mathrm{.}00,$ increasing thereafter at an annual growth rate of $9$ percent. The corporation's tax rate is $24$ percent.

d$.$ A preferred stock paying a dividend of $9$ percent on a $$120$ par value. If a new issue is offered, flotation costs will be $14$ percent of the current price of $$174.$

e$.$ A bond selling to yield $11$ percent after flotation costs, but before adjusting for the marginal corporate tax rate of $24$ percent. In other words, $11$ percent is the rate that equates the net proceeds from the bond with the present value of the future cash flows $($principal and interest$).$