1) A firm is paying an annual dividend of $6

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1) A firm is paying an annual dividend of $6.00 for its preferred stock which is selling for $69.00. There is a selling cost of $3.00. What is the after-tax cost of preferred stock if the firm's tax rate is 35%? (Round your answer to 2 decimal places.)

10.54%

9.09%

11.24%

7.74%

2) A firm's stock is selling for $77. The next annual dividend is expected to be $3.00. The growth rate is 9%. The flotation cost is $8. What is the cost of retained earnings? (Round your answer to 2 decimal places.)

10.75%

11.55%

12.90%

14.35%

3) The coupon rate on an issue of debt is 9%. The yield to maturity on this issue is 10%. The corporate tax rate is 32%. What would be the approximate after-tax cost of debt for a new issue of bonds? (Round your answer to 2 decimal places.)

6.80%

8.95%

5.45%

8.25%

4) Firm X has a tax rate of 25%. The price of its new preferred stock is $68 and its flotation cost is $2.00. The cost of new preferred stock is 11%. What is the firm's dividend? (Round your answer to 2 decimal places.)

$9.41

$7.26

$5.91

$8.71

5) Expected cash dividends are $4.00, the dividend yield is 8%, flotation costs are 6% of price, and the growth rate is 3%. Compute cost of new common stock. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

12.51%

11.51%

13.61%

11.26%

6) The coupon rate on a debt issue is 5%. If the yield to maturity on the debt is 9%, what is the after-tax cost of debt in the weighted average cost of capital if the firm's tax rate is 33%? (Round your answer to 2 decimal places.)

7.38%

8.18%

4.68%

6.03%