Question
Please show work, thank you in advance. The after tax cost of debt on a 6% $50,000 loan given a 35% tax bracket would be:
Please show work, thank you in advance.
The after tax cost of debt on a 6% $50,000 loan given a 35% tax bracket would be:
- 3.9% (correct)
- 0.039%
- 6%
- 4%
If the dividends paid on a preferred stock issue are $5 per share and the price of new stock after subtracting flotation costs is $25, calculate cost of preferred stock.
- 20% (correct)
- .2%
- 5%
- 6%
The after tax cost of debt on a 9% $200,000 loan given a 30% tax bracket for the firm would be:
- 9%
- 6.3% (correct)
- 5%
- 4%
If the dividends paid on a preferred stock issue are $3 per share and the cost of preferred stock is 12%, calculate the price of the stock. Assume there are no flotation costs.
- $12
- $20
- $36
- $25 (correct)
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