A bond that has a 1000 per value face value and a contract

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Reference no: EM13394900

Compute the costs of capital for the firm for the following.

a.A bond that has a 1,000 per value and a contract or coupon interest rate 10.5%. The bonds have a current market value of 1,128 and will mature in 10 years. The firms marginal tax rate is 34%.

b.A new common stock issue that paid a $1.83 dividend last year.The firm’s dividends are expected to continue to grow at 6.6% per year forever.The price of the firms common stock is now $27.82 .

c.A preferred stock paying a 9.5% dividend on a $100 per value .

d.A bond selling to yield 11.3% where the firms tax rate is 34%

Reference no: EM13394900

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