Use the following data for the next $5$ questions: Use the following data for the next $5$ questions:

Debt $63,000$ bonds with a $5\mathrm{.}0\%$ coupon rate,

payable annually, $15$ years to maturity,

selling at $$1,050$ per bond.

Common

Stock

Preferred

Stock

Market

Tax Rate

$567,000$ shares of common stock

outstanding. The stock sells for a price

of $$87$ per share and has a beta of $1\mathrm{.}98.$

$250,000$ preferred shares outstanding,

currently trading at $$63\mathrm{.}11$ per share;

with an annual dividend payment of

$$8\mathrm{.}54,$

The market risk premium is $16\%$ and the

risk free rate is $6\%$

$21\%$

What is the after tax cost of debt $(R_d)?($Answer as a percentage and round to $2$ decimals$)$

a$.1\mathrm{.}55\%$

b$.3\mathrm{.}58\%$

c$.5\mathrm{.}96\%$

d$.1\mathrm{.}01\%$

e$.6\mathrm{.}55\%$ Use the following data for the next $5$ questions:

Debt $63,000$ bonds with a $5\mathrm{.}0\%$ coupon rate,

payable annually, $15$ years to maturity,

selling at $$1,050$ per bond.

Common

Stock

Preferred

Stock

$567,000$ shares of common stock

outstanding. The stock sells for a price

of $$87$ per share and has a beta of $1\mathrm{.}98.$

$250,000$ preferred shares outstanding,

currently trading at $$63\mathrm{.}11$ per share;

with an annual dividend payment of

$$8\mathrm{.}54,$

Market

The market risk premium is $16\%$ and the

risk free rate is $6\%$

Tax Rate

$21\%$

What is the cost of preferred stock $(R_p)?($Answer as a percentage and round to $2$ decimals$)$

a$.11\mathrm{.}50\%$

b$.15\mathrm{.}91\%$

c$.16\mathrm{.}50\%$

d$.10\mathrm{.}96\%$

e$.13\mathrm{.}53\%$ Use the following data for the next $5$ questions:

Debt $,63,000$ bonds with a $5\mathrm{.}0\%$ coupon rate,

payable annually, $15$ years to maturity,

selling at $$1,050$ per bond.

Common $,567,000$ shares of common stock

Stock outstanding. The stock sells for a price

of $$87$ per share and has a beta of $1\mathrm{.}98.$

Preferred $250,000$ preferred shares outstanding,

Stock currently trading at $$63\mathrm{.}11$ per share;

with an annual dividend payment of

$$8\mathrm{.}54,$

Market The market risk premium is $16\%$ and the

risk free rate is $6\%$

Tax Rate

$21\%$

What is the cost of common stock $(\{$:$R_E)?($Answer as a percentage and round to $2$ decimals$)$

a$.37\mathrm{.}68\%$

b$.35\mathrm{.}11\%$

c$.35\mathrm{.}65\%$

d$.40\mathrm{.}06\%$

e$.40\mathrm{.}65\%$Use the following data for the next $5$ questions:

Debt

$63,000$ bonds with a $5\mathrm{.}0\%$ coupon rate,

payable annually, $15$ years to maturity,

selling at $$1,050$ per bond.

Common

$567,000$ shares of common stock

Stock

outstanding. The stock sells for a price

of $$87$ per share and has a beta of $1\mathrm{.}98.$

Preferred

$250,000$ preferred shares outstanding,

Stock

currently trading at $$63\mathrm{.}11$ per share;

with an annual dividend payment of

$$8\mathrm{.}54,$

Market

The market risk premium is $16\%$ and the

Debt

$63,000$ bonds with a $5\mathrm{.}0\%$ coupon rate,

payable annually, $15$ years to maturity,

selling at $$1,050$ per bond.

Common $567,000$ shares of common stock

Stock outstanding. The stock sells for a price

of $$87$ per share and has a beta of $1\mathrm{.}98.$

Preferred

$250,000$ preferred shares outstanding,

Stock

currently trading at $$63\mathrm{.}11$ per share;

with an annual dividend payment of

$$8\mathrm{.}54,$

Market The market risk premium is $16\%$ and the

risk free rate is $6\%$

Tax Rate

$21\%$

What is the before tax cost of debt $(R_d)?($Answer as a percentage and round to $2$ decimal$)$

a$.2\mathrm{.}50\%$

b$.6\mathrm{.}91\%$

c$.7\mathrm{.}50\%$

d$.4\mathrm{.}53\%$

e$.1\mathrm{.}96\%$