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The cost of debt is the YTM of the bonds, so: = $1,080 = $32(PVIFAR %,50) + $1,000 (PVIFR%,50) R = 2.895% YTM =
The cost of debt is the YTM of the bonds, so: = $1,080 = $32(PVIFAR %,50) + $1,000 (PVIFR%,50) R = 2.895% YTM = 2.895% 2 = 5.790% And the after-tax cost of debt is: = RD (10.35)(0.0579) RD = 0.037635, or 3.764% The cost of preferred stock is:
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Personal Financial Planning
Authors: Lawrence J. Gitman, Michael D. Joehnk, Randy Billingsley
13th edition
1111971633, 978-1111971632
