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Question 8 only. Thanks perpetual annual dividend of $4.90 per share. New issues of preferred stock would incur $7 per share in flotation costs. Compute

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Question 8 only. Thanks

perpetual annual dividend of $4.90 per share. New issues of preferred stock would incur $7 per share in flotation costs. Compute the cost of new preferred stock. 8. Reason Corp. just issued a series of 30-year maturity bonds with a par value of $1.000 and a 6% coupon, paid semiannually. The bonds can sell in the open market for $925. Flotation costs on the new bonds are $90. If Reason, Corp. is in the 35% tax bracket, what is the pre-tax cost of debt on the newly issued bonds? 9. Lee Airlines plans to issue 15-year bonds with a par value of $1,000 that will pay $50 every six months. The bonds have a market price of $920. Flotation costs on new debt will be 6%. If the firm is in the 35% marginal tax bracket, what is the posttax cost of new debt? 10. Fisheye Inc. is investing in a new project costing $24 million. It will raise $8 million in bonds, $6 million in preferred stock, and $10 million in retained earnings. If the after-tax cost of debt is 6%, cost of preferred stock is 12%, the cost of retained earnings is 16%, and the cost of new common stock is 20%, what is the WACC

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