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Andividual or component costs of capital) Your firm is considering a new investenent proposal and would use to calculate its weighted average cost of capital.

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Andividual or component costs of capital) Your firm is considering a new investenent proposal and would use to calculate its weighted average cost of capital. To help in this, compute the cost of che/al for the fim for the following a. A bond that has a $1,000par value (tace value) and a contract or cocipon inlernst rase of 114 percent that is paid somiannualy. The bond is currently seiling for a price of $1,130 and wil mature in 10 yean. The ferm's tax rate is 34 percent. b. If the firm's bonds are not firequenty traded, how would you 90 about determining a cost of debt for this company? c. A new common alock asue that paid a $1.71 dvidend last year. The par value of the slock is $14, and the firmit dividends per ahare have grown at a rate of 63 percent per year, Thill growin rate is expected to continue into the foreseeoble future. The price of this atock is now 528.36. d. A preferned stock paying a 10.5 percect dividend on a $129 parvale. The prelerred sharos are turrency seling for 5154.63. 6. A bond seling to yiald 12.5 percent foe the purchaser of the bond. The borrowing firm faces a tak rate of 34 percent. a. The aftec-tax cost of debt trom the from is 4s. (Round to two decinal places.)

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