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Company A has a $10 million debt issue outstanding, with a 6% coupon rate. The debt has semiannual coupons, the next coupon is due in six months, and the debt matures in five years. It is currently priced at 95% of par value. What is Company’s A pretax cost of debt?
Company A has a $10 million debt issue outstanding, with a 8% coupon rate. The debt has semiannual coupons, the next coupon is due in six months, and the debt matures in five years. It is currently priced at 95% of par value. If the company has a 41% tax rate What is Company’s A post tax cost of debt?
Company’s A stock has a beta of 2.86. If the risk-free rate is 5.56% and the market risk premium is 10.57%, what is an estimate of Company’s A cost of equity?
