The? after-tax cost of debt

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Crypton Electronics has a capital structure consisting of 37 percent common stock and 63 percent debt. A debt issue of ?$1,000 par? value, 5.6 percent bonds that mature in 15 years and pay annual interest will sell for ?$975 Common stock of the firm is currently selling for ?$29.42 per share and the firm expects to pay a ?$2.27 dividend next year. Dividends have grown at the rate of 5.3 percent per year and are expected to continue to do so for the foreseeable future. What is? Crypton's cost of capital where the? firm's tax rate is 30 ?percent? a. The? after-tax cost of debt is %.? ?(Round to two decimal? places.)

Reference no: EM131573506

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