1) Cost of funds

1) Cost of funds. Solve the following cases independently using the Gordon Growth Model of determining the cost of funds. A. 10%, Bonds Payable P10,000 Market price 120 Flotation costs 5% Tax rate 40% Cost of debt ? B. 12%, Preferred Shares P200 Market value P350 Flotation costs 6% Tax rate 40% Cost of preference share C. Current dividend on ordinary share P12 Growth rate 10% Expected dividend ? D. Current dividend on ordinary share P8 Return on equity 15% Payout rate 30% Expected dividend E. Current dividend on ordinary share P8 Growth rate 10% Market price per ordinary share P55 Flotation costs 6% Cost of ordinary share ? Cost of retained earnings