### The dividend is not expected to change in the future

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a. A \$1,000 par value bond with a market price of \$975 and a coupon interest rate of 7 percent. Flotation costs for a new issue would be approximately 6 percent. The bonds mature in 14 years and the corporate tax rate is 36 percent.

b. A preferred stock selling for \$116 with an annual dividend payment of \$12. The flotation cost will be \$6 per share. The? company's marginal tax rate is 30 percent.

c. Retained earnings totaling \$4.8 million. The price of the common stock is \$67 per? share, and dividend per share was \$8.42 last year. The dividend is not expected to change in the future.

d. New common stock when the most recent dividend was \$3.17. The? company's dividends per share should continue to increase at a growth rate of 8 percent into the indefinite future. The market price of the stock is currently \$55?; ?however, flotation costs of \$ 9 per share are expected if the new stock is issued.

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