Calculate the AT kd, ks, kn  for the following information:

  Loan rates for this firm  = 9%

  Growth rate of dividends  = 4%

  Tax rate  = 30%

  Common Dividends at t1  = $ 4.00

  Price of Common Stock  = $35.00

  Flotation costs  = 6%

2. Your firm's ks is 10%,  the cost of debt is 6% before taxes, and the tax rate is 40%.  Given the following balance sheet, calculate the firm's after tax WACC:

  Total assets  = $25,000

  Total debt  =   15,000

  Total equity  =   10,000

3. What determines whether to use the dividend growth model approach or the CAPM approach to calculate the cost of equity?

Answer rating: 100% (QA)

To calculate the aftertax cost of debt kd kd Loan rates 1 Tax rate kd 009 1 030 0063 or 63 To calcul... View the full answer