Crypton Electronics has a capital structure of 41 percent stock and 59 percent debt. A debt issue of $11,000, 6.4 percent bonds that mature in 15 years and pay annual interest will be sold for $979. The firm's common stock currently sells at $29.17 per share, and the firm expects to pay a dividend of $2.28 next year. Dividends rose 4.9 percent per year and are expected to continue to grow in the near future. What is Crypton's cost of capital when the firm's tax rate is 30 percent?

Cost of debt after tax

Answer rating: 100% (QA)

The cost of debt after tax can be calculated using the following formula Cost of Debt after tax Cost ... View the full answer