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Answer to Question #38721 in Other Management for Daniel

Question #38721
What is the component cost for Coogly's preferred stock?
What are the advantages and disadvantages of using preferred stock in the capital structure?
What is the cost of new equity to the firm?
What are the advantages and disadvantages of issuing new equity in the capital structure?
What is the cost of new debt?

What are the advantages and disadvantages of issuing new debt in the capital structure?
what is the weighted average cost of capital for Coogly?
What are the advantages and disadvantages of using this method in the capital budgeting process?
The capital structure for the firm will be maintained and is now 10% preferred stock, 30% debt, and 60% new common stock. No retained earnings are available. The marginal tax rate for the firm is 40%.

Coogly has outstanding preferred stock That pays a dividend of $4 per share and sells for $82 per share, with a floatation cost of $6 per share.

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