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What the required rate of return for the company

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Reference no: EM132528209

A firm is 30% debt and 70% equity. The firm's tax rate is 40%. Their bonds trade for $990, mature in five years, and have a coupon rate of 8% paid annually. The firm's common stock trades at $15 per share and just paid a dividend of $3per share. The dividends are expected to grow at a rate of 3% per year forever.

Round all answers to the nearest hundredth - Example 5.01 for 5.01%

Question 1: The bond's yield is 

Question 2: The required rate of return for the company's common stock is

Question 3: The cost of financing for this firm (WACC)

Reference no: EM132528209

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