Compute the cost of capital for the firm for the following:

a.A bond that has a

$1,000

par value (face value) and a contract or coupon interest rate of

11.4

percent. Interest payments are

$57.00

and are paid semiannually. The bonds have a current market value of

$1,121

and will mature in

10

years. The firm's marginal tax rate is

34

percet.b.A new common stock issue that paid a

$1.83

dividend last year. The firm's dividends are expected to continue to grow at

7.6

percent per year, forever. The price of the firm's common stock is now

$27.09.

c.A preferred stock that sells for

$142,

pays a dividend of

9.7

percent, and has a $100 par value.d.A bond selling to yield

12.4

percent where the firm's tax rate is

34

percent.

Question content area bottom

Part 1

a.The after-tax cost of debt is

enter your response here%.

(Round to two decimal places.)