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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:

  1. 3.9% (correct)
  2. 0.039%
  3. 6%
  4. 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.

  1. 20% (correct)
  2. .2%
  3. 5%
  4. 6%

The after tax cost of debt on a 9% $200,000 loan given a 30% tax bracket for the firm would be:

  1. 9%
  2. 6.3% (correct)
  3. 5%
  4. 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.

  1. $12
  2. $20
  3. $36
  4. $25 (correct)

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