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The BEAR Company has 1,500 bonds outstanding that have a market price of $980 each. floatation cost is 0.02 the bond pays coupon of 0.04

The BEAR Company has 1,500 bonds outstanding that have a market price of $980 each. floatation cost is 0.02 the bond pays coupon of 0.04 semiannually for 15 years. The company also has 5,000 shares of preferred stock at a market price of $38 and dividends 0.7 each. The common stock is priced at $28 a share it is undervalued by $2 and there are 36,000 shares outstanding, the stock is expected to pay $1.1 and will continue to grow at a rate of 0.065.

TAXES ARE 0.4

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