QUESTION 36 A firm is looking to expand its operations and is needing to raise...
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QUESTION 36 A firm is looking to expand its operations and is needing to raise $1,000,000. It intends raise capital using the following Tax rate: 32% 10-year bond that sells for $950 with a coupon interest of 5.75% 7.5%, $100 par value, perpetual preferred stock sells for $115 Common stock sells for $45. DO = 3.50 and has a growth rate of 6.5%; flotation costs of $3 If the company intends to have a target capital structure of 45% debt, 35% preferred stock, and 20% common equity, what is the cost of capital? 67.8296 7.3396 8.01% 7.21%
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