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please solve: A. after-Tax cost of debt B. cost of common equity C. the after-tax cost of debt D. th cost of preferred stock for
please solve:
A. after-Tax cost of debt
B. cost of common equity
C. the after-tax cost of debt
D. th cost of preferred stock for the firm
(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 8.81 percent while the borrowing firm's corporate tax rate is 34 percent. b. Common stock for a firm that paid a $1.04 dividend last year. The dividends are expected to grow at a rate of 4.2 percent per year into the foreseeable future. The price of this stock is now $24.04. c. A bond that has a $1,000 par value and a coupon interest rate of 12.1 percent with interest paid semiannually. A new issue would sell for $1,149 per bond and mature in 20 years. The firm's tax rate is 34 percent. d. A preferred stock paying a dividend of 6.8 percent on a $97 par value. If a new issue is offered, the shares would sell for $85.66 per shareStep by Step Solution
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