what is pc after tax cost of debt

what is pc after tax cost of preffered stock

Use the following information to answer the NEXT FOUR QUESTIONS: Pelican Corp. (PC) 20-year, $1,000 par value bonds paying annual interest at an 11% rate are selling for $990, net of all costs. PC perpetual preferred stock has a par value of $100 and pays an annual dividend of 12%. PC can sell new preferred stock for $96 per share, net of flotation costs. Just one year ago preferred stock could be sold for $104. PC common stock is currently trading for $19 per share. The last common stock dividend paid was $2 per share, and dividends are expected to grow at a constant 3%. The firm's marginal tax rate is 40%. The risk-free rate is 3%. The S&P 500 is expected to return 10%. PC has the following information on its long-term capital. Furthermore, PC wants to maintain this financing mix: Source of capital Long-term debt Preferred stock Common stock equity Total Value $ 3,000,000 1,000,000 6.000.000 $10,000,000 Ouestion 27 4 nts