Reference no: EM132553739
Compute the cost of capital for the firm for the? following:
a. A bond that has a ?$1,000 par value? (face value) and a contract or coupon interest rate of 11.6%. Interest payments are ?$58.00 and are paid semiannually. The bonds have a current market value of ?$1,124 and will mature in 10 years. The? firm's marginal tax rate is 34%.
b. A new common stock issue that paid a ?$1.82 dividend last year. The? firm's dividends are expected to continue to grow at 6.9% per? year, forever. The price of the? firm's common stock is now ?$27.31.
c. A preferred stock that sells for ?$150?, pays a dividend of 8.1 ?percent, and has a? $100 par value.
d. A bond selling to yield 12.7 percent where the? firm's tax rate is 34 percent.
Question 1: What is the after-tax cost of debt is ________?%? ?(Round to two decimal? places.)
Question 2: What is the Cost of Equity ?
Question 3: What is the Cost of Debt?
Question 4: What is cost of preferred Stock?
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