With additional work, you have gathered more information on companies in your industry as shown below. These

Question:

With additional work, you have gathered more information on companies in your industry as shown below. These companies have both bonds and preferred shares outstanding. This table shows the amount of interest (I) and the price of the bonds (Pd) related to $100 bonds. The tax rate (t) varies for each company because of various provincial incentives.

Required:
Calculate the cost of debt and the cost of preferred shares for each of the companies.

Cost Of Debt
The cost of debt is the effective interest rate a company pays on its debts. It’s the cost of debt, such as bonds and loans, among others. The cost of debt often refers to before-tax cost of debt, which is the company's cost of debt before taking... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...