Company is reevaluating existing bond

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1. Your company is reevaluating its existing bond because it plans to issue a new bond soon. The outstanding issue has 7 years remaining until maturity. The bonds were issued with a 6.25 percent coupon rate (paid semiannually) with a par value of $1,000. Because of increased risk the required rate has risen to 10.125 percent. What is the current price?

2. What is the cost of common stock equity of Shock Rock Stock if it is currently selling for $38. It has issuing expenses as follows: flotation costs - $2.50 and underwriting fees of $1.50. The dividends are listed below: year 2014 div-3.50 year 2013 div-3.45 year 2012 div-3.40 year 2011 div-3.35.

Reference no: EM131919825

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