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please help with explanation 3. A company with a tax rate of 40% borrows $100 million from lender A at a cost of 8% and
please help with explanation
3. A company with a tax rate of 40% borrows $100 million from lender A at a cost of 8% and $300 million from lender B at a cost of 6%. What is the firm's aggregate cost of borrowing (a) before taxes; and (b) assuming a tax rate of 40 %, after taxes? 4. Assume the current stock price is $25 per share; next year's dividend is expected to be $1.50 and dividends are expected to grow at 3% per year from here on out. What would be the cost of equity for this firm? 5. Assume the following: The risk-free rate is 2.5%; the expected return on the market is 8% and this firm's stock is one and one-half times as risky as the market on average. What would be the cost of equity for this firm Step by Step Solution
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