QUESTION 8 Liabilities & Equity Assets (in Millions) Current Net Fixed $40 Bonds (S1000 Par) Preferred Stock (S100 Par) Common Stock (51 par) Total 50 30 20 $100 Total S100 The company has some bonds outstanding with coupon rate of 14% and semi-annual payments. the bonds currently sell for $996. The maturity of those bonds is 10 years. The company's applicable tax rate is 40%. The preferred stocks pay quarterly dividend of $1.75 and their market price is S84.50 The dividends of the common stocks of this company have been growing steadily at 6% per year, and this growth rate is expected to continue in the future. Last years dividend was $1.45. The floatation cost for new common stocks is 10%. The floatation cost on preferred stock is 5%. The market value of the common stock is $155. Assume the company is going to issue new preferred stocks and new common stocks. What is the cost of new common stock? 14.85% O 17.02% O 15.24% 19.54% 21.35%