(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 6 percent. A new issue would have a floatation cost of 6 percent of the $1,140 market value. The bonds mature in 7 years. The firm's average tax rate is 30 percent and its marginal tax rate is 37 percent.

b. A new common stock issue that paid a $1.50 dividend last year. The par value of the stock is $15, and earnings per share have grown at a rate of 11 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 $24, but 6 percent flotation costs are anticipated.

c. Internal common equity when the current market price of the common stock is $51. The expected dividend this coming year should be $3.40, increasing thereafter at an annual growth rate of 7 percent. The corporation's tax rate is 37 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 11 percent of the current price of $173.

e. A bond selling to yield 8 percent after flotation costs, but before adjusting for the marginal corporate tax rate of 37 percent. In other words, 8 percent is the rate that equates the net proceeds from the bond with the present value of the future cash flows (principal and interest).

a. What is the firm's after-tax cost of debt on the bond?

nothing%

(Round to two decimal places.)

b. What is the cost of external common equity?

nothing%

(Round to two decimal places.)

c. What is the cost of internal common equity?

nothing%

(Round to two decimal places.)

d. What is the cost of capital for the preferred stock?

nothing%

(Round to two decimal places.)

e. What is the after-tax cost of debt on the bond?

nothing%

(Round to two decimal places.)