Compute the following cost of the following sources of finance.docx

Compute the following cost of the following sources of finance.docx

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Compute the following cost of the following sources of finance. a) A $1000 par value bond with a market price of $970 and a coupon interest rate of 10%. Floatation costs for a new issue would be approximately 5%. The bonds mature in 10 years and the corporate tax rate is 34%. b) A preferred stock selling for $100 with an annual dividend payment of $8. If the company sells a new issue, the floatation cost will be $9 per share. The company’s marginal tax rate is 30%. c) Internally generated common stock totalling $4.8 million. The price of the common stock is
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