What is the cost of cdebt

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Question 1: The capital structure for the Bias Corporation follows. The company plans to maintain its debt structure in the future. If the firm has a 6 percent after-tax cost of debt, a 13.5 percent cost of preferred stock, and a 19 percent cost of common stock, what is the firm's weighted cost of capital?

CAPITAL STRUCTURE ($000) : Bonds $1,100

Preferred stock $250

Common stock $3,700

Question 2: A bond selling to yield 12 percent after flotation costs, but prior to adjusting for the marginal corporate tax rate of 34 percent. In other words, 12 percent is the rate that equates the net proceeds from the bond with the present value of the future cash flows (principal and interest). What is the cost of cdebt?

Reference no: EM132498289

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