Compute the cost of capital for the firm for the following: a. A bond that...
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Accounting
Compute the cost of capital for the firm for the following:
a. A bond that has a $1000 par value (face value) and a contract or coupon interest rate of 10.4%. Interest payments ar $52.00 and are paid semiannually. The bonds have a current market value of $1,122 and will mature in 10 years. The firms marginal tax rate is 34%.
B. A new common stock issue that paid a $1,77 dividend last year. The firms dividends are expected to continue to grow at 6.2% per year, forever. The price of the firm's common stock is now $27.56.
C. A preferred stock that sells for $145, pays a dividend of 8.4% and has a $100 par value.
D. A bond selling to yeild 11.4% where the firm's tax rate is 34%
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