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no excel please Rogers Corporation has $30 million (face value) of 6% coupon bonds outstanding that mature in twenty years. The bonds make semiannual coupon
no excel please
Rogers Corporation has $30 million (face value) of 6% coupon bonds outstanding that mature in twenty years. The bonds make semiannual coupon payments and are currently priced to yield 4%. This is their only debt issue outstanding. Rogers has 2 million shares outstanding and the shares are currently selling for $20 per share. The common stock has a beta of 1.1, the market's expected return is 11% and the risk-free rate is 3%. Rogers has an average income tax rate of 35% and a marginal tax rate of 38%. Required: a. Determine both the before-tax and after-tax cost of debt for Rogers Corporation. b. Determine the cost of equity for Rogers Corporation using the CAPM. c. Rogers is considering expanding its business and needs to discount the expected future after-tax cash flows. What discount rate should Rogers use? Explain and calculate the appropriate rateStep by Step Solution
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