BASICALLY DONE WITH THIS QUESTION BUT NEED THE AFTER TAX COST! a. A bond that has...

BASICALLY DONE WITH THIS QUESTION BUT NEED THE AFTER TAX COST!

a. A bond that has a $1000 par value (face value) and a contract or coupon interest rate of 11.3 percent. Interest payments are $56.50 and are paid semiannually. The bonds have a current market value of $1128 and will mature in 10 years. The firm's marginal tax rate is 34 percet.

b. A new common stock issue that paid a $1.77 dividend last year. The firm's dividends are expected to continue to grow at 7.3 percent per year, forever. The price of the firm's common stock is now $27.07.

c. A preferred stock that sells for $152, pays a dividend of 8.2 percent, and has a $100 par value.

d. A bond selling to yield 11.7 percent where the firm's tax rate is 34 percent.

a. The after-tax cost of debt is

6.14%.

b. The cost of common equity is

14.32%

c. The cost of preferred stock is

5.39%.

d. The after-tax cost of debt is ?

Expert Solution

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jeff jeffy answered 1 year ago

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