(Individual or component costs of capital)Compute the cost of capital for the firm for the following:

a.Currently bonds with a similar credit rating and maturity as the firm's outstanding debt are selling to yield

7.237.23

percent while the borrowing firm's corporate tax rate is

3434

percent.

b.Common stock for a firm that paid a

$1.041.04

dividend last year. The dividends are expected to grow at a rate of

5.75.7

percent per year into the foreseeable future. The price of this stock is now

$24.5824.58.

c.A bond that has a

$1 comma 0001,000

par value and a coupon interest rate of

11.411.4

percent with interest paid semiannually. A new issue would sell for

$1 comma 1491,149

per bond and mature in

2020

years. The firm's tax rate is

3434

percent.

d.A preferred stock paying a dividend of

7.47.4

percent on a

$9090

par value. If a new issue is offered, the shares would sell for

$83.0783.07

per share.