Question: Can someone help me solve this problem? Concrete Inc. is looking to estimate their cost of capital for use in evaluating investment opportunities. Their 7%

Can someone help me solve this problem?

Concrete Inc. is looking to estimate their cost of capital for use in evaluating investment opportunities. Their 7% coupon, semiannual payment, 15 year maturity, $1000 par value bond currently trades at $968.73. Concrete's $100 par value, 8.6% annual dividend paying preferred stock currently trades at $82.72. If they were to issue new securities concrete Inc anticipates additional floatation cost of about 4% on debt, and 4.5% on preferred stock. Their marginal tax rate is 34%

Question 1) Compute Concrete's before and after tax cost of debt?

Question 2) Compute Concrete's cost of preferred stock?

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