Prin. of Financial Management Save HW Score: 45.56%, 4.56 of 10 points O Points: 0 of 1 Question 6, Problem 9-1... Part 1 of 4 Homework: HW ... (Individual or component costs of capital Compute the costs for the following sources of financing 2. A $1,000 par value bond with a market price of $955 and a coupon Interest rate of 6 percent. Flotation costs for a new issue would be approximately 7 percent. The bonds mature in 9 years and the corporate tax rate is 23 percent b. A preferred stock selling for $118 with an annual dividend payment of $8. The flotation cost will be $7 per share. The company's marginal tax rate is 23 percent. in c. Retained earings totaling $4.8 million. The price of the common stock is $76 per share, and dividend per share was $9.84 last year. The dividend is not expected to change in the future d. Now common stock for which the most recent dividend was $3.13. The company's dividends per share should continue to increase at a growth rate of 11 percent into the indefinito future. The market price of the stock is currently $45; however, flotation costs of $9 per share are expected if the new stock is issued. 1. What is the firm's after-tax cost of debt on the bond? 0% (Round to two decimal places.) Question Viewer