(Individual or component costs of capital)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

11.0

percent. Interest payments are

$55.00

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

$1,125

and will mature in

10

years. The firm's marginal tax rate is

34

percet.

b.A new common stock issue that paid a

$1.80

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

7.0

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

$27.50.

c.A preferred stock that sells for

$125,

pays a dividend of

9.0

percent, and has a $100 par value.

d.A bond selling to yield

12.0

percent where the firm's tax rate is

34

percent.

a.The after-tax cost of debt is

nothing%.

(Round to two decimal places.)

b.The cost of common equity is

nothing%.

(Round to two decimal places.)

c.The cost of preferred stock is

nothing%.

(Round to two decimal places.)

d.The after-tax cost of debt is

nothing%.

(Round to two decimal places.)

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