Compute the cost of capital for the firm for the following
January 11th, 2018
Compute the cost of capital for the firm for the following:a. a bond that has a $1,000 par value and a contract or coupon interest rate of 10.6%. The bonds have a current market value of $1,120 and will mature in 10 years. The firm’s marginal tax rate is 34%.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 6.6% per year forever. The price of the firms common stock is now $27.44.c. a preferred stock paying a 9.9% dividend on a $121 par valued. a bond selling to yield 11.1% where the firm’s tax rate is 34%