Chapter 10 Bodden Developments Cayman Islands had the following capital structure which they consider to be optimal. Capital Structure $ Bonds 6% CR, Mkt $ 600,000 rate, 8% Preferred stock, $6 Common Stock Retained Earnings Total 300,000 1,200,000 400,000 2,500,000 Dividends on common stock are currently $5 per share and are expected to grow at a constant rate of 7%. Market price per share of common stock is $40, and the preferred stock is selling at $60. Flotation cost on the new issues of common stock is 10%. Interest on bonds is paid annually. The company's tax rate is 35%. Chapter 10 Bodden Developments Cayman Islands had the following capital structure which they consider to be optimal. Capital Structure $ Bonds 6% CR, Mkt $ 600,000 rate, 8% Preferred stock, $6 Common Stock Retained Earnings Total 300,000 1,200,000 400,000 2,500,000 Dividends on common stock are currently $5 per share and are expected to grow at a constant rate of 7%. Market price per share of common stock is $40, and the preferred stock is selling at $60. Flotation cost on the new issues of common stock is 10%. Interest on bonds is paid annually. The company's tax rate is 35%