2. An overview of a firm's cost of debt The is the interest rate that a firm pays on any new debt financing. Perpetualcold Refrigeration Company (PRC) can borrow funds at an interest rate of 11.10% for a period of four years. Its marginal federal-plus-state tax rate is 25%. PRC's after-tax cost of debt is (rounded to two decimal places). At the present time, Perpetualcold Refrigeration Company (PRC) has 15-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have a current market price of $1,136.50 per bond, carry a coupon rate of 12%, and distribute annual coupon payments. The company incurs a federal-plus-state tax rate of 25%. If PRC wants to issue new debt, what would be a reasonable estimate for its after-tax cost of debt (rounded to two decimal places)? (Note: Round your YTM rate to two decimal place.) 6.889 9.17 8.79% O 7.64% 3. The cost of preferred stock Preferred stock is a hybrid security, because it has some characteristics typical of debt and others typical of equity. The following table lists various characteristics of preferred stock. Determine which of these characteristics is consistent with debt and which is consistent with equity, Characteristics Dividends are foced. Debt Equity o Failure to pay a preferred dividend does not send the firm into bankruptcy. a Consider the case of Bogdan Enterprises: At the present time, Bogdan Enterprises does not have any preferred stock outstanding but is looking to include preferred stock in its capital structure in the future. Bogdan has found some institutional investors that are willing to purchase its preferred stock issue provided that it pays a perpetual dividend of $13 per share. If the investors pay $100.15 per share for their investment, then Bogdan's cost of preferred stock (rounded to four decimal places) will be 2. An overview of a firm's cost of debt The Is the interest rate that a firm pays on any new debt financing before-tax cost of debt mpany (PRC) can borrow funds at an interest rate of 11.10% for a period of four years. Its marginal federal-plus-state taxe after-tax cost of debt x cost of debt is (rounded to two decimal places) Perd At the present time, Perpetualcold Refrigeration Company (PRC) has 15-year noncallable bonds with a face value of $1,000 that are outstanding These bonds have a current market price of $1,136.50 per bond, carry a coupon rate of 12%, and distribute annual coupon payments. The company incurs a federal-plus-state tax rate of 25%. If PRO wants to issue new debt, what would be a reasonable estimate for its after-tax cost of debt (rounded to two decimal places)? (Note: Round your YTM rate to two decimal place.) 0 5.88% 9.17% 8.79% 7.64% 2. An overview of a firm's cost of debt The is the interest rate that a firm pays on any new debt financing Perpetualcold Refrigeration Company (PRC) can borrow funds at an interest rate of 11.10% for a period of four years. Its marginal federal-plus state tax rate is 25%. PRC's after-tax cost of debt is -rounded to two decimal places) At the present time, Perpetualcold Refrigeration 7.07% (PRC) has 15 year noncallable bonds with a face value of $1,000 that are outstanding These bonds have a current market price of $1.0.57% bond, carry a coupon rate of 12%, and distribute annual coupon payments. The company Incurs a federal-plus-state tax rate of 25% to issue new debt, what would be a reasonable estimate for its after-tax cost of debt 8.32% Crounded to two dedmal places)? (Note: Round ja rate to two decimal place.) 9.15% 6.889 9.17 8.79% 7.54 3. The cost of preferred stock Preferred stock is a hybrid security, because it has some characteristics typical of debt and others typical of equity. The following table lists various characteristics of preferred stock. Determine which of these characteristics is consistent with debt and which is consistent with equity. Debt Equity Characteristics Dividends are fixed Failure to pay a preferred dividend does not send the firm into bankruptcy. 12.3315% Consider the ca Enterprises: 14.2786% At the presente 15,5766% Enterprises does not have any preferred stock outstanding but is looking to include preferred stock in its capital structure and some institutional investors that are willing to purchase its preferred stock issue provided that it pays a perpetual the investors pay $100.15 of share for their investment, then Bogdan's cost of preferred stock (rounded to four decimal places) will be in the future. 12.9805% dividend of $12