(Individual or component costs of capital) Compute the costs for the following sources of financing:

a. A $ 1000 par value bond with a market price of $ 945 and a coupon interest rate of 11 percent. Flotation costs for a new issue would be approximately 9 percent. The bonds mature in 8 years and the corporate tax rate is 35 percent. What is the firm's after-tax cost of debt on the bond?

b. A preferred stock selling for $ 106 with an annual dividend payment of $ 11 The flotation cost will be $ 8 per share. The company's marginal tax rate is 30 percent. What is the cost of capital for the preferred stock?

c. Retained earnings totaling $ 4.8 million. The price of the common stock is $ 71 per share, and dividend per share was $ 9.31 last year. The dividend is not expected to change in the future. What is the cost of internal common equity?

d. New common stock for which the most recent dividend was $ 2.81. The company's dividends per share should continue to increase at a growth rate of 8 percent into the indefinite future. The market price of the stock is currently $ 61; however, flotation costs of $ 8 per share are expected if the new stock is issued. What is the cost of external common equity?