Calculate the firms after tax cost of debt

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Reference no: EM131448999

1. A company currently pays an annual dividend of $1.25(D0). If the growth rate of dividends is 7.5%, what is the value of the dividend one year from now?

$0.90

$1.34

$1.57

$2.36

$1.11

2. Calculate the firm's after tax cost of debt if the current coupon rate on existing debt is 7% and the firm has a tax rate of 40%.

2.8%

4.2%

4.0%

12.6%

Reference no: EM131448999

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