Posted: March 6th, 2014
A bond that a $1000 par value (face value) and a contract or coupon interest rate is 10.9%. The bonds…
-  A bond that a $1000 par value (face value) and a contract or coupon interest rate is 10.9%.  The bonds have a current market value of $1,123 and will mature in 10 years.  The firm’s marginal tax rate is 34%.
-  A new common stock issue that paid a $1.76 dividend last year.  The firm’s dividends are expected to continue to grow at 7.9% per year forever.  The price of the firm’s common stock is now $27.13
- A Preferred stock paying 9.2% dividend on a $131 par value.
- A bond selling to yield 12.6% where the firm’s tax rate is 34%
The cost of Capital from this bond debt is?
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