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The BEAR Company has 1,500 bonds outstanding that have a market price of $1200 each. floatation cost is 0.02 the bond pays coupon of 0.05

The BEAR Company has 1,500 bonds outstanding that have a market price of $1200 each. floatation cost is 0.02 the bond pays coupon of 0.05 semiannually for 10 years. The company also has 5,000 shares of preferred stock at a market price of $32 and dividends 1.5 each. The common stock is priced at $32 a share it is undervalued by $2 and there are 36,000 shares outstanding, the stock is expected to pay $2 and will continue to grow at a rate Of 0.07 .

TAXES ARE 0.3

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