What is cost of debt and the cost of equity

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Reference no: EM131931975

1. The cost of debt

Cordona corp has bonds outstanding that will mature twelve years from now. These bonds are currently quoted at 110 percent above par value. the issue makes annual payments of $80 on $1,000 bond face value. what is cordonas cost of debt?

2. The cost of equity

The divident of ONGO Inc is currently $2 per share and is supposed to grow at 5 percent a year forever. its share price of $50. its beta is 1.08. the market risk premium is 5 percent and the risk free rate is 4 percent. what is your best estimate of ongos cost of equity?

Reference no: EM131931975

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