Requi red what i s the after tAX cost of debts ? Bates Corporation is considering four

 Requi red 

what i s the after tAX cost of debts ?

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Bates Corporation is considering four average risk projects with the following costs and rates of return: Expected Project Cost Rate of Return 1 $4,000 18% 2 $3,000 16% 3 $7,000 13.75% $2,000 12.50% The company estimates that it can issue debt at a rate of rd 10%, and its tax rate is 30%. = It can issue preferred stock that pays a constant dividend of $5.00 per year at $40.00 per share. Also, its common stock currently sells for $32.00 per share; the next expected dividend, D1, is $3.50; and the divi expected to grow at a constant rate of 6% per year. The target capital structure consists of 75% common stock. 15% debt, and 10% preferred stock. Bates Corporation is considering four average risk projects with the following costs and rates of return: Expected Project Cost Rate of Return 1 $4,000 18% 2 $3,000 16% 3 $7,000 13.75% $2,000 12.50% The company estimates that it can issue debt at a rate of rd 10%, and its tax rate is 30%. = It can issue preferred stock that pays a constant dividend of $5.00 per year at $40.00 per share. Also, its common stock currently sells for $32.00 per share; the next expected dividend, D1, is $3.50; and the divi expected to grow at a constant rate of 6% per year. The target capital structure consists of 75% common stock. 15% debt, and 10% preferred stock.

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Heres the breakdown Debt Rate rd 10 Tax Rate T 30 A... View the full answer