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Use the following information to answer the accompanying questions. lackstone Company wants to raise $6 million for investing in a new outlet, which will give

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Use the following information to answer the accompanying questions. lackstone Company wants to raise $6 million for investing in a new outlet, which will give a 12% return on its investment. The money will be obtained from the following sources: Note: The above indudes payment of dividends and issue costs only. The cost of capital for each source of financing is: Bond A 10.0% Bond B 12.5% Common shares 16.0% Preferred shares 12.0% Retained earnings 14.0% Growth rate 2.0% The company's corporate income tax rate is 40%. Determine the following: (1) Cost of capital for Bond A. (1 mark) (2) Cost of capital for Bond B. (1 mark) (3) Cost of capital for common shares. (1 mark) (4) Cost of capital for preferred shares. (1 mark) (5) Cost of capital for retained earnings. (1 mark) (6) The weighted average cost of capital. ( 2 marks)

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