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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 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%
The bond's yield is %
The required rate of return for the company's common stock is %.
The cost of financing for this firm (WACC) is %.
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