?(Individual or component costs of capital?) Compute the cost of the? following: a. A bond that has...

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?(Individual or component costs of capital?) Compute the cost ofthe? following:
a. A bond that has ?$1,000 par value? (face value) and acontract or coupon interest rate of 8 percent. A new issue wouldhave a floatation cost of 8 percent of the ?$1,140 market value.The bonds mature in 11 years. The? firm's average tax rate is 30percent and its marginal tax rate is 36 percent.
b. A new common stock issue that paid a ?$1.60 dividend lastyear. The par value of the stock is? $15, and earnings per sharehave grown at a rate of 12 percent per year. This growth rate isexpected to continue into the foreseeable future. The companymaintains a constant? dividend-earnings ratio of 30 percent. Theprice of this stock is now ?$23?, but 7 percent flotation costs areanticipated.
c. Internal common equity when the current market price of thecommon stock is ?$43. The expected dividend this coming year shouldbe ?$3.00?, increasing thereafter at an annual growth rate of 9percent. The? corporation's tax rate is 36 percent.
d. A preferred stock paying a dividend of 9 percent on a ?$100par value. If a new issue is? offered, flotation costs will be 13percent of the current price of ?$169.
e. A bond selling to yield 9 percent after flotation? costs, butbefore adjusting for the marginal corporate tax rate of 36 percent.In other? words, 9 percent is the rate that equates the netproceeds from the bond with the present value of the future cashflows? (principal and? interest).

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?(Individual or component costs of capital?) Compute the cost ofthe? following:a. A bond that has ?$1,000 par value? (face value) and acontract or coupon interest rate of 8 percent. A new issue wouldhave a floatation cost of 8 percent of the ?$1,140 market value.The bonds mature in 11 years. The? firm's average tax rate is 30percent and its marginal tax rate is 36 percent.b. A new common stock issue that paid a ?$1.60 dividend lastyear. The par value of the stock is? $15, and earnings per sharehave grown at a rate of 12 percent per year. This growth rate isexpected to continue into the foreseeable future. The companymaintains a constant? dividend-earnings ratio of 30 percent. Theprice of this stock is now ?$23?, but 7 percent flotation costs areanticipated.c. Internal common equity when the current market price of thecommon stock is ?$43. The expected dividend this coming year shouldbe ?$3.00?, increasing thereafter at an annual growth rate of 9percent. The? corporation's tax rate is 36 percent.d. A preferred stock paying a dividend of 9 percent on a ?$100par value. If a new issue is? offered, flotation costs will be 13percent of the current price of ?$169.e. A bond selling to yield 9 percent after flotation? costs, butbefore adjusting for the marginal corporate tax rate of 36 percent.In other? words, 9 percent is the rate that equates the netproceeds from the bond with the present value of the future cashflows? (principal and? interest).