7. L. Bob Rife Company's preferred stock is currently selling for $140.00 and pays a...
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7. L. Bob Rife Company's preferred stock is currently selling for $140.00 and pays a perpetual annual dividend of $9.00 per share. New issues of preferred stock would incur $20 per share in flotation costs. Compute the cost of new preferred stock. 8. Reason Corp. just issued a series of 24-year maturity bonds with a par value of $1,000 and a 5% coupon, paid semiannually. The bonds can sell in the open market for $1,175. Flotation costs on the new bonds are $80. If Reason, Corp. is in the 35% tax bracket, what is the pre-tax cost of debt on the newly issued bonds
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