The? after-tax cost of debt from the firm

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Reference no: EM131497591

A bond that has a ?$1,000 par value? (face value) and a contract or coupon interest rate of 12.8 percent that is paid semiannually. The bond is currently selling for a price of $1,129 and will mature in 10 years. The? firm's tax rate is 34 percent.

a. The? after-tax cost of debt from the firm is %?

b. If the? firm's bonds are not frequently? traded, how would you go about determining a cost of debt for this? company?

c. A new common stock issue that paid a $1.78 dividend last year. The par value of the stock is ?$15 and the? firm's dividends per share have grown at a rate of 8.3 percent per year. This growth rate is expected to continue into the foreseeable future. The price of this stock is now ?$27.21

d. A preferred stock paying a 9.8 percent dividend on a ?$125 par value. The preferred shares are currently selling for $151.82

e. A bond selling to yield 13.5 percent for the purchaser of the bond. The borrowing firm faces a tax rate of 34 percent.

Reference no: EM131497591

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