1.A ten-year bond, with par value equals $1000, has a 10% coupon and pays interest semi-annually. If similar bonds are currently yielding 6% annually, what is the market value of the bond?

2.Using the constant growth model, a firm?s expected (D1) dividend yield is 3% of the stock price, and it?s growth rate is 7%. If the tax rate is .35%, what is the firm?s cost of equity?

3.

Capital structure is 40% debt, 10% preferred stock, and 50% common equity
Common stock currently sells for	$45.00
The expected CS dividend is	$2.00
Growth rate is	6.00%
Flotation cost on CS	$2.25
Flotation cost on PS	$1.10
Preferred stock sells for	$50.00
PS pays a dividend of	$4.00
Market yield on bonds is	11.25%
Tax rate is	34.00%

Calculate the firm's cost of debt