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IBM company's Stock and Bond information is provided below: Bond Time to Maturity: 20-years; Annual Coupon Rate: 7.00%; PAR Value: $1,000; Currently trading at: $1,275.54
IBM company's Stock and Bond information is provided below:
- Bond Time to Maturity: 20-years; Annual Coupon Rate: 7.00%; PAR Value: $1,000; Currently trading at: $1,275.54
- Preferred Stock Preferred Stock Price: $64.00; Preferred Annual Dividend: $3.50
- Common Stock (Method 1) Equity Beta: 1.2; Risk-free Rate: 3.00%; Market Risk Premium: 6.00%
- Common Stock (Method 2) Long-run earnings growth: 7.00%; Expected Dividend (in one year): $2.10; Current Stock Price: $57.66
How much is IBMs after-tax cost of debt, if the corporate tax rate for the company is 25.0%?
Enter your answer in the following format: 0.1234;
Hint: Answer is between 0.0318 and 0.0405
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