1- After-Tax Cost of Debt: The Heuser Company's currently outstanding bonds have a 10% coupon...
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Finance
1- After-Tax Cost of Debt: The Heuser Company's currently outstanding bonds have a 10% coupon and a 12% yield to maturity. Heuser believes it could issue new bonds at par that would provide a similar yield to maturity. If its marginal tax rate is 35%, what is Heuser's after-tax cost of debt?
2- Cost of Preferred Stock: Tunney Industries can issue perpetual preferred stock at a price of $47.50 a share. The stock would pay a constant annual dividend of $3.80 a share. What is the company's cost of preferred stock rp?
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