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The following information and questions pertain to the Central Dental Company The Central Dental Company has a preferred stock that pays a $5.5 dividend each

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The following information and questions pertain to the Central Dental Company The Central Dental Company has a preferred stock that pays a $5.5 dividend each year, and currently sells for $64.50. The company's marginal tax rate is 40 percent The market price of the Central Dental Company's common stock is $46. The dividend to be paid at the end of the following year is $4.6 per share and is expected to continue to grow indefinitely at a constant rate of 6% Central Dental Company's has a before-tax cost of debt ki 10%, Its tax rate is 40%. a) Based on the information about the Central Dental Company, what is the cost of preferred stock, kps, for Central Dental Company? SHOW YOUR CALCULATION ( 2 Points) b) Based on the information about the Central Dental Company's common stock, calculate the cost of this common stock. SHOW YOUR CALCULATION ( 2 Points) c) Based on the information about the Central Dental Company's before-tax cost of debt, ki and its tax rate, what is Central Dental Company's after-tax cost of debt, kd? SHOW YOUR CALCULATION (2 Points)

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