An Irish firm has issued a 10 year 50 million bond which is trading at...

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Accounting

An Irish firm has issued a 10 year 50 million bond which is trading at 96.45, the bonds
coupon is 2.90% and the yield of the bond is 3.3%. The yield on risk-free government bonds is
1%. The firm has 1,250,000 shares outstanding which are trading at 85 per share. The
companys beta is 0.85 and the expected return of the ISEQ Index (the market return) is 12%.
The firm is expected to pay a dividend of 6 per share and its growth rate is estimated to be
4%. The corporate tax rate for the firm is 15%.
a. What is the firms cost of debt and cost of equity?

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