Question: Use the below data for Questions 1 - 3 : XYZ Corp. can issue a 1 5 - year, $ 1 , 0 0 0

Use the below data for Questions 1-3:
XYZ Corp. can issue a 15-year, $1,000 par value bond with a 10% coupon rate, paying interest
semiannually, at price of $862.35. Their marginal tax rate is 40%. A dividend of $1.25 was just paid on
the firm's common stock, and the firm's estimated growth rate is 8%. It can issue new common stock at
$25.00 with a 20% flotation cost. The Risk-free Return is 6%, the Market Return is 12%, and the firm's
beta is 1.2.
Calculate XYZ Corp's Cost of Debt, after-tax.
Calculate XYZ Corp's Cost of Retained Earnings using the CAPM.
Calculate XYZ Corp's Cost of new Common Stock.
 Use the below data for Questions 1-3: XYZ Corp. can issue

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