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QUESTION 40 A firm has issued a bond. The bond has a 6% coupon rate, paid semiannually, a current maturity of 20 years, and sell
QUESTION 40 A firm has issued a bond. The bond has a 6% coupon rate, paid semiannually, a current maturity of 20 years, and sell for $1,000. The firms marginal tax rate is 21%. Whats the firms after-tax component cost of debt? 7.9% 5.5% 6.0% 21%
QUESTION 41 A firms preferred stock currently sells for $100 per share and pays a dividend of $11 per share. However, the firm will only receive $95 per share from the sale of new preferred stock due to the floatation costs. Whats the firms component cost of Preferred stock? 10.5% 10.9% 11.6% 12.3%
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