What is the company cost of preferred stock

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Quantitative Problem: Barton Industries can issue perpetual preferred stock at a price of $43 per share. The stock would pay a constant annual dividend of $3.70 per share. If the firm's marginal tax rate is 40%, what is the company's cost of preferred stock? Round your answer to 2 decimal places.

Answer: %

Quantitative Problem: 5 years ago, Barton Industries issued 25-year noncallable, semiannual bonds with a $1,650 face value and a 10% coupon, semiannual payment ($82.5 payment every 6 months). The bonds currently sell for $845.87. If the firm's marginal tax rate is 40%, what is the firm's after-tax cost of debt? Round your answer to 2 decimal places. Do not round intermediate calculations.

Answe: %

Answer: %

Reference no: EM132016971

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