The current market price of a $ 1000 par bond is $ 1 , 025. Its semiannual
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Question:
The current market price of a $1000 par bond is $1,025. Its semiannual coupon rate is 7% and it matures in 5 years. What is the pretax cost of debt?
- What is the after-tax cost of debt using the data from above and assuming a 40% marginal tax rate?
What is the cost of preferred stock financing if it pays a constant dividend of $3.00 and is currently selling for $35.00 per share?
- What is the after-tax of preferred stock ?
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