Question1: Compute and describe the after-tax cost of preferred stock for a company which is planning to sell 10 million dollar of $4.50 cumulative preferred stock to the public at a price of $48 a share. Marginal tax rate is 40 percent.
Question2: Compute the after-tax cost of a 25 million dollar debt issue that a company with a 40% marginal tax rate is planning to place privately with a large insurance company. This long-term issue will yield 6.6% to the insurance co. compute and describe