Debt can be issued at a yield percent, dividend of $4.40. The flotation cost on the preferred stock is $4. he corporate tax rate is 35 percen a. Compute the aftertax cost of debt. (Do not round intermediate calculations. Inpu places.) Aftertax cost of debt %
Debt can be issued at a yield percent, dividend of $4.40. The flotation cost on the preferred stock is $4. he corporate tax rate is 35 percen a. Compute the aftertax cost of debt. (Do not round intermediate calculations. Inpu places.) Aftertax cost of debt %
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Complete a,b,&c please
Transcribed Image Text:1
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Debt can be issued at a yield of 9.0 percent, and the corporate tax rate is 35 percent. Preferred stock will be priced at $56 and pay a
dividend of $4.40. The flotation cost on the preferred stock is $4.
rences
Mc
Graw
a. Compute the aftertax cost of debt. (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal
places.)
Aftertax cost of debt
b. Compute the aftertax cost of preferred stock. (Do not round intermediate calculations. Input your answer as a percent rounded to
2 decimal places.)
Aftertax cost of preferred stock
%
c. Based on the facts given above, is the treasurer correct?
No, the treasurer is incorrect.
O Yes, the treasurer is correct.
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it say all answers above are incorrect, i need the aftertax cost of debt and the aftertax cost of preferred stock as a percent rounded to 2 decimal places.
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