Marginal corporate income tax-what costs of preferred stock

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Reference no: EM131011566

Our company has issued $2,000 bonds with an annual coupon rate of 4%. If the marginal corporate income tax is 15%, what is our cost of debt?

Our company has also issued $5,000 preferred stock. The face value is $100, and coupon rate is 6%, and market pays $105 for a share. What is the cost of preferred stock?

Five years ago we issued 1,000 common stock with an issue price of $18 per share. Analysts find out the current Beta of our company is 1.78. What is the cost of equity if current T-bill rate is 2.35% and expected return on the market portfolio this year is 7%? (4 Points) (4) Find the overall cost of capital for our company.

Reference no: EM131011566

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