Instructions Answer the following questions in a separate document. Explain how you reached the answer or show your work if

Instructions
Answer the following questions in a separate document. Explain how you reached the answer or show your work if a mathematical calculation is needed, or both. Submit your assignment using the assignment link.
Please respond to the following:
Bad Boys, Inc. is evaluating its cost of capital. Under consultation, Bad Boys, Inc. expects to issue new debt at par with a coupon rate of 8
% and to issue new preferred stock with a $2.50 per share dividend at $25 a share. The common stock of Bad Boys, Inc. is currently selling for $20.00 a share. Bad Boys, Inc. expects to pay a dividend of $1.50 per share next year. An equity analyst foresees a growth in dividends at a rate of 5
% per year. The Bad Boys, Inc. marginal tax rate is 35
%. If Bad Boys, Inc. raises capital using 45
% debt, 5
% preferred stock, and 50
% common stock, what is Bad Boys, Inc.’s cost of capital?
If Bad Boys, Inc. raises capital using 30
% debt, 5
% preferred stock, and 65
% common stock, what is Bad Boys, Inc.’s cost of capital?

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