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A COMPANY WANTS A company wants to determine its cost of capital. The company FOR MORE CLASSES VISIT www.tutorialoutlet.com Question #1: A company wants to determine its cost of capital. The company cansell a 12%, 10 year semiannual bond (with $1,000 par value) for $1,030. Also, the company can sell new common stock at $20 per share with a flotation cost of $2 per share. Its recent dividend was $1.80 and its constant growth rate is 5%. The company finances its capital by 40% debt, 10% common stock, and 50%
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