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question has multiple parts, thank you! (Individual or component costs of capital) Compute the cost of capital for the firm for the following: a. A
question has multiple parts, thank you!
(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 10.3 percent. Interest payments are $51.50 and are paid semiannually The bonds have a current market value of $1,128 and will mature in 10 years. The firm's marginal tax rate is 34 percet b. A new common stock issue that paid a $1.78 dividend last year. The few's dividends are expected to continue to grow at 6.3 percent per year, forover. The price of the firm's common stock is now $27.56. c. A preferred stock that sells for $147, pays a dividend of 8.3 percent, and has a $100 par value. d. A bond selling to yield 12.6 percent where the firm's tax rate is 34 percent. GREREDE a. The after-tax cost of debt is 1% (Round to two decimal places) Step by Step Solution
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