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Question 10 A company is going to issue a $1,000 par value bond that pays a...

Question 10

A company is going to issue a $1,000 par value bond that pays a 7% annual coupon. The company expects the market price to be $942 for the 20-year bond. The expected flotation cost per bond is 4.5%, and the firm is in the 34% tax bracket. Compute the firm's after-tax cost of new debt .

7.57%

8.02%

5.00%

5.30%

Question 15

Asian Trading Company just paid a dividend of $5 per share. The dividend is expected to grow at a constant rate of 8% per year. The price of Asian Trading Company's stock today is $29 per share. If Asian Trading Company decides to issue new common stock, flotation costs will equal 11%. Asian Trading Company's marginal tax rate is 35%. Based on the above information, the cost of new common stock is

28.92%.

25.24%.

26.62%.

27.37%.

Please answer both questions... I need it

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