What is the cost of debt for LeBron INC? The firm is in the 40% tax bracket. The optimal capital structure is listed below: Source of Capital Long-Term Debt Preferred Stock Common Stock Weight 25% 20% 55% Debt: Preferred Stock: The firm can issue $1,000 par value, 8% coupon interest bonds with a 20-year maturity date. The bond has an average discount of $30 and flotation costs of $30 per bond. The selling price is $1,000. The firm can sell preferred stock with a dividend that is 8% of the current price. The stock costs $95. The cost of issuing and selling the stock is expected to be $5 per share. The firm's common stock is currently selling for $90 per share. The firm expects to pay cash dividends of $7 per share next year. The dividends have been growing at 6%. The stock must be discounted by S7, and flotation costs are expected to amount to $5 per share. The firm expects to have enough retained earnings in the coming year to be used in place of any new stock being issued. Common Stock: Retained Earnings