After Tax Cost Of Debt

Chapter 10 10-2. After- assess comprise of Debt LL Incorpo sum upds currently outstanding 11% coupon bonds have a move over to maturity of 8%. LL believes it could issuance at par new bonds that would admit a akin(predicate) interpret to maturity. If its marginal revenue enhancement rate is 35% what is LLs after-tax apostrophize of debt? After tax equal of debt = rd(1-T) Bonds wear8% Tax35% After tax cost of debt = 5.20% 10-4. toll of preferent Stock with Floataion Costs Burnwood Tech plans to publicise some $60 par preferred contrast with a 6% divid break. The express is selling on the grocery for $70, and Burnwood must(prenominal) hand flotation costs of 5% of the market hurt. What is the cost of the preferred stock? rps=Dps/Pps(1-F) favourite(a) stock$60 Selling value (Pps)$70 Dividend yield6% Floatation costs (F)5% Preferred Dividend (Dps)$3.60 rps =5.41% = 6% 3.60 (1 - 5%) 10-5 Summerdahl Resorts leafy vegetabl e stock is currently barter at $36 a share. The stock is expected to pay a dividend of $3 a share at the end of the yr (D1 = $3.00), and the dividend is expected to grow at a changeless rate of 5% a year. What is the cost of common impartiality?

rs = D1/P0 + g latest Stock price (Po)$36 Current Dividend price (D1)$3 Expected dividend growth (g)5% Cost of common honor =13.33% = 3/36 + 5% 10-6. Cost of Equity: CAPM Booher keep Store has a beta of 0.8. The yield on a 3 month T-Bill is 4% and the yield on a 10 year T-Bond is 6%. The market fortune bountifulness is 5.5%, but the stock market rejoi nder in the foregoing years was 15%. What i! s the estimated cost of common equity use the CAPM? rs = rRF + (RPM) bi T-Bill yield4% T-Bond yield (rRF)6% Market return15% Market risk subvention (RPM)5.5% Beta (bi)0.8...If you want to get a practiced essay, aver it on our website: OrderCustomPaper.com

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