What is the before tax cost of debt

What is the after tax cost of debt

What is the cost of preferred stock

What is the cost of common equity

Pete each question nformation Gizmo Inc has outstanding 30-year bonds with an 8% coupon rate, annual payments Its preferred stock is selling for $75 and pays a fixed dividend of $7.5. Gizmo Inc. common stock for $100 and has a beta The dividend paid was $10 and dividends are expected to grow at 10% a year. The target Capital structure calls for 30% debt, 10% Preferred Stock, and 60% Common Equity. Gizmo Inc. is considering the purchase of a new machine to replace an old one. The original cost of the old machine was $50,000; it is now 1 year old and has a market value of $33,500. It is being depreciated using the MACRS 3-year class life and can be used for three more years at which time it will be worthless. The cost of the replacement machine is $100,000, has a useful life of 3 years, and an estimated market value of $14,000 at the end of three years. Sales are expected to increase by $75,000 per year The new machine will be depreciated using the MACRS 3-year class life. The firm has a marginal tax rate of 40%. The MACRS 3-year class life rates are 33%, 45%, 15% and 7% Question 23 (1 point) What is the before-tax cost of debt? 8.0% 4.1%