What is the firms after-tax component cost of debt

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Burn wood Tech plans to issue some $60 par preferred stock with a 7% dividend. A similar stock is selling on the market for $60. Burn wood must pay flotation costs of 6% of the issue price. What is the cost of the preferred stock? Round your answer to two decimal places

A company's 8% coupon rate, semi-annual payment, $1,000 par value bond that matures in 20 years sells at a price of $593.17. The company's federal-plus-state tax rate is 30%. What is the firm's after-tax component cost of debt for purposes of calculating the WACC? (Hint: Base your answer on the nominal rate.) Round your answer to two decimal places

Reference no: EM13724077

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