Jury Company wants to calculate the component costs in its capital structure. Common stock currently sells for $27.00, and is expected to pay a dividend of .50. Jury’s dividend growth rate is 8% and flotation cost is $1.25. Preferred stock sells for $46.00, pays a dividend of $5.00, and carries a flotation cost of $1.10. Jury company bonds yield 9% in the market. Jury is in the 34% tax bracket.
Calculate the following
1.) cost of debt
2.) cost of common stock
3.) cost of new common stock
4.) cost of preferred stock
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