Haverty corps bonds are selling to yield new investors a, Ask an Expert

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Haverty Corp's bonds are selling to yield new investors a return of 9%, while it's preferred stock is yielding 11%. Flotation costs are 10% of the proceeds of new issues sold to the public, and the firm's tax rate is 40%. The company just paid a dividend of $2.00 and is expected to grow at 6% indefinitely. Its stock is selling for $21.20.

a. What is Haverty's cost of debt?
b. What is Haverty's cost of preferred stock?
c .What is Haverty's cost of retained earnings using the expected growth approach?

What is Haverty's cost of new equity?

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M9871146

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