The cost of common equity

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Reference no: EM13815493

A) A bond that has a $ 1,000 par value (face value) and a contract or coupon interest rate of 11.3%. Interest rates are $56.50 and are paid semi annually. The bonds have a current market value of$ 1,121 and will mature in 10 years. The firm's marginal tax rate is 34%.

a) The after tax cost of debt is ______%

B) A new common stock issue that paid a dividend of $1.76 million last year. The firm's divendends are expected to grow at 6.1 percent, per year, forever. The price of the stock is currently $27.58

b) The cost of common equity is ______%

c) A preffered stock that sells for $154, pays a divendend of 9.1 percent, and has a $100 par value.

c) The cost of preffered stock is ______%

A bond selling to yield at 11.7 percent where the firm's tax rate is34%

d) The after-tax cost of debt is ____%

Reference no: EM13815493

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