What is after-tax cost of the preferred equity

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1. Bond prices and maturity dates. Les Company is about to issue a bond with annual coupon payments, an annual coupon rate of 10%, and par value of $1,000. The yield to maturity for this bond is 7%. What is the price of the bond if it matures in 10?

2. What is the after-tax cost of the following preferred equity. The par value of the preferred share is $100 and the annual dividend is 6.5%. The preferred shares have no stated maturity. The current market price of the share is $65. Assume that the corporate tax rate is 35%.

Reference no: EM131916553

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