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( Individual or component costs of capital ) Compute the cost of capital for the firm for the following: a . A bond that has
Individual or component costs of capitalCompute the cost of capital for the firm for the following:
aA bond that has a $ par value face value and a contract or coupon interest rate of percent. Interest payments are $ and are paid semiannually. The bonds have a current market value of $ and will mature in years. The firm's marginal tax rate is percent.
bA new common stock issue that paid a $ dividend last year. The firm's dividends are expected to continue to grow at percent per year, forever. The price of the firm's common stock is now $
cA preferred stock that sells for $ pays a dividend of percent, and has a $ par value.
dA bond selling to yield percent where the firm's tax rate is percent.
aThe aftertax cost of debt is Round to two decimal places.
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