Question: 1. A new bond issue is being issued at a market price of $422 with a 11.4% interest rate and will be due in 16

1. A new bond issue is being issued at a market price of $422 with a 11.4% interest rate and will be due in 16 years. If the firm has a 32 percent tax rate, calculate the after tax cost of debt. 2. A company has a preferred stock issue with a $7.95 dividend with a market price of $112 and float costs of $8.85. Calculate the cost of preferred stock 1

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