When calcukating the cost of debt, how do you figure out the circle blue i.e the $45 and how to use the table for the semi annual payments (30, YTM/2) would that mean 30%, 15 years period used in the table?

thanks

How do you calculate out the circled blue figures? ie the $45 and how to use the table (30, YTM/2) - does it mean 30%, 15 periods?

Thanks

Contemporary Products Ltd currently has $200 min of market value debt outstanding. The percent coupon bonds (semiannual pay have a maturity of 15 years, a face value of $1000 and are currently priced at $102487 per bond. The company also has an issue of 2 million preference shares outstanding with a market price of $20. The preference shares offer an annual dividend of $1.20. Contemporary Products also has 14 million ordinary shares outstanding with a price of $20.00 per share. The company is expected to pay a $2.20 ordinary dividend 1 year from today, and that dividend is expected to increase by 7 percent per year forever. If the corporate tax rate is 40 per cent, then what is the company's weighted average cost of capital Stap 1 Total amount of dubt, ordinary equity and I prefermd equity. Debt $200,.. opo lgium) Preferond equity = $20 x 2,ovo, vou - 540, ovo, nou Ordinary equity = $20 x 14,000,oou = 8280, suo, ooo Ital capital = 5520, ooo, ooo z Dubt a 200 1520 -0.3846 aps - 401520 = 0.07 69 als - 280 1320 = 0.5385 is yrs.. anual, madurity 30 tis=45. Step 2: lost of capital components host of dubt: $1,624.87 845) * PuIFA 1430 4TM 12 & $1,000 Solving we find that YTM 0.0870 (this is a Lost of preferred quity PUIF ((30 YTM12) pre-tad moeber) kups - 51.20 ps fr.co