# Cost of capital for the firm_a bond that has a \$1000 par value (face

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 11.2%. The bond have a current market value of \$1,123 and will mature in 10 years. The firm’s marginal tax rate is 34%
B: If the firm’s bonds are not frequently traded, how would you go about determining a cost of debt for this company.
C: A new common stock issue that paid a \$1.72 dividend last year. The par value of the stock is \$15 and the firm’s dividends per share have grown at a rate of 7.8% per year. This growth rate is expected to continue into the foreseeable future. The price of this stock is now \$27.58
D: A preferred stock paying a 10.5% dividend on a \$127 par value. The preferred shares are currently selling for \$154.32.
E: A bond selling to yield 12.3% for the purchaser of the bond. The borrowing firm faces a tax rate of 34%

A: A bond that has a \$1,000 par value (face value) and a contract or coupon interest rate 11.2%. The bonds have a current market value of \$1,123 and will mature in 10 years. The firm’s marginal tax rate is 34%
The cost of capital from this bond debt is ____%

A: a bond that has a \$1000 par value (face value) and a contract or coupon interest rate of 11.2%. The bond have a current market value of \$1,123 and will mature in 10 years. The firm’s marginal tax rate is 34%  b.If the firm’s bonds are not frequently traded, how would you go about determining a cost of debt for this company?
C: A new common stock issue that paid a \$1.72 dividend last year. The par value of the stock is \$15 and the firm’s dividends per share have grown at a rate of 7.8% per year. This growth rate is expected to continue into the foreseeable future. The price of this stock is now \$27.58
D: A preferred stock paying a 10.5% dividend on a \$127 par value. The preferred shares are currently selling for \$154.32.
E: A bond selling to yield 12.3% for the purchaser of the bond. The borrowing firm faces a tax rate of 34%

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