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Business, 08.05.2021 04:50 Danielyanez

You are given the following information concerning Parrothead Enterprises: Debt: 9,300 7.4 percent coupon bonds outstanding, with 21 years to maturity and a quoted price of 108.75. These bonds have a par value of $2,000 and pay interest semiannually. Common stock: 320,000 shares of common stock selling for $66.40 per share. The stock has a beta of 1.09 and will pay a dividend of $4.60 next year. The dividend is expected to grow by 5.4 percent per year indefinitely. Preferred stock: 9,900 shares of 4.70 percent preferred stock selling at $95.90 per share. Market: 10.1 percent expected return, a risk-free rate of 4.55 percent, and a 24 percent tax rate. What is the firm's cost of each form of financing

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