Finance on Bad Boys, Inc.

Bad Boys, Inc. is evaluatin” rel=”nofollow”>ing 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 sellin” rel=”nofollow”>ing 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” rel=”nofollow”>in dividends at a rate of 5% per year. Bad Boys, Inc. margin” rel=”nofollow”>inal tax rate is 35%. If Bad Boys, Inc. raises capital usin” rel=”nofollow”>ing 45% debt, 5% preferred stock, and 50% common stock, what is
Bad Boys cost of capital? B. If Bad Boys, Inc. raises capital usin” rel=”nofollow”>ing 30% debt, 5% preferred stock, and 65% common stock, what is Bad Boys cost of capital? C. On page 457, your textbook details the
term Cannibalization. In your own words, identify two corporations that have dealt with cannibalization and what steps were taken to overcome the cannibalization. Please provide any citations and
references. Please be articulate in” rel=”nofollow”>in your responses.

find the cost of your paper