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need help with 6,7,8 to answer question 9 thank you 6. What is the after-tax cost of debt for a company in the 42% tax
need help with 6,7,8 to answer question 9
thank you
6. What is the after-tax cost of debt for a company in the 42% tax bracket with a bond outstanding at 13% maturity? What if the tax bracket is 46% ? What if the tax bracket is 38%? 7. What is the cost of preferred stock if the annual dividend is $8.75, stock price is $12, and the flotation cost is $3? How is the cost of preferred stock impacted if the annual dividend increases to $9? What if the annual dividend decreases to $8.50? = 8. What is the cost of new common stock if the dividend is $2.50, price $25, flotation cost is $1.75, and the growth rate is 5% ? How is the cost of new common stock impacted if the growth rate increases to 7 %? What if the growth rate decreases to 3%? 9. Use the information from the three previous problems above (the initial numbers) to calculate the weighted average cost of capital with the weight of debt being 35 %, preferred stock 15%, and common stock 50%.
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