Svenco wants to calculate the component costs in its

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SvenCo wants to calculate the component costs in its capital structure. Common stock currently sells for $33, and is expected to pay a dividend of $.40. Sven's dividend growth rate is 8%, and flotation cost is $1.25. Preferred stock sells for $40, pays a dividend of $3.00, and carries a flotation cost of $1.10. Jury Company bonds yield 7% in the market. Sven is in the 30% tax bracket.
Calculate cost of debt, cost of new common stock, cost of preferred stock and cost of retained earnings.

Reference no: EM13598800

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