Question 10

A company is going to issue a $1,000 par value bond that pays a7% annual coupon. The company expects the market price to be $942for the 20-year bond. The expected flotation cost per bond is 4.5%,and the firm is in the 34% tax bracket. Compute the firm'safter-tax cost of new debt .

		7.57%
		8.02%
		5.00%
		5.30%

Question 15

Asian Trading Company just paid a dividend of $5 per share. Thedividend is expected to grow at a constant rate of 8% per year. Theprice of Asian Trading Company's stock today is $29 per share. IfAsian Trading Company decides to issue new common stock, flotationcosts will equal 11%. Asian Trading Company's marginal tax rate is35%. Based on the above information, the cost of new common stockis

		28.92%.
		25.24%.
		26.62%.
		27.37%.

Please answer both questions... I need it