Bonds: Crow Corporation has bonds with 6 years to maturity and a face value of $1000. The coupon rate is 7.8% and coupons are paid semiannually. The bonds trade at $990 per bond. The (before-tax) cost on any new debt will be the same as the yield to maturity on the current bonds.
Preferred Stock: Crow issues preferred stock with a $2.85 dividend per year. They are sold to the market at $27 per share, but issue costs are $2 per share.
Retained Earnings: Crow has a just paid a dividend of $2.40. The retention rate is 40% and return on equity (ROE) is 20%. The price of the common stock is $36 per share.