What is the after-tax cost of debt in weighted average cost

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Reference no: EM132017273

1. An issue of common stock is selling for $56.70. The year end dividend is expected to be $2.25 assuming a constant growth rate of 9%. What is the required rate of return? (Round your answer to 1 decimal place.)

2. If expected dividends grow at 5% and the appropriate discount rate is 7%, what is the value of a stock with an expected dividend of $3.15? (Round your answer to 2 decimal places.)

3. The coupon rate on a debt issue is 7%. If the yield to maturity on the debt is 10%, what is the after-tax cost of debt in the weighted average cost of capital if the firm's tax rate is 35%? (Round your answer to 2 decimal places.)

Reference no: EM132017273

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