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Buitrite has comie up with the following capital structure which imanagement believos is optirnat: Bonds:...

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Buitrite has comie up with the following capital structure which imanagement believos is optirnat: Bonds: Builtrite is planning on offering a $1000 par value. 20-year, 8 coupon bond with an expected selling price of 51025 . Flotation costs would be 955 per bond Preferred Stock: Builtrite could sell a $46 par value preferred with an 8% coupon for $38 a share. Flotation costs would be $2 share. Common stock: Currently, the stock is selling for $65 a share and has paid a $2.82 dividend. Dlvidends are expected to continue growing at 10%. Flotation costs would be $3.75 a share and Builtrite has $350,000 in available retained earnings. Assume a 40% tax bracket. What is the after-tax cost of new common? 15.5% 15.1% 74.6% 15.9%

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