Question: 1 4 - 6 . ( Computing individual or component costs of capital ) Compute the cost of capital for the firm for the following:
Computing individual or component costs of capital Compute the cost of capital for the firm for the following:
a Currently, new bond issues with a credit rating and maturity similar to those of the firm's outstanding debt are selling to yield percent, while the borrowing firm"s corporate tax rate is percent.
b Common stock for a firm that paid a $ dividend last year. The dividends are expected to grow at a rate of percent per year into the foresecable future. The price of this stock is now $
c A bond that has a $ par value and a coupon interest rate of percent with interest paid semiannually. A new issue would sell for $ per bond and mature in years. The firm's tax rate is percent.
d A preferred stock paying a percent dividend on a $ par value. If a new issue is offered, the shares would sell for $ per share.
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scippert a
For part bohange market price to $ dividend paid last year to $ and the growth rate to
For part conange the coupon rate to and the tax rate to
For part d change the dividend percentage to and the price the shares would sell for to $ per share
B
tablePolloum pricel,$
Please solve for Excel, also not sure if I did part A correctly
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