Inventive Response has bonds outstanding that mature in 8.5 years, have a 4 percent coupon, and pay interest annually. These bonds have a face value of $1,000 and a current market price of $1,180.30. What is the company’s after-tax cost of debt if its tax rate is 21 percent? 1.35 percent 1.70 percent 2.15 percent 2.65 percent 3.40 percent Therapeutic Solutions Inc. just paid an annual dividend of $1.45 per share last year. The market price of the stock is $26.30 and the growth rate is 5 percent. What is the firm’s cost of equity? 10.51 percent 10.79 percent 11.06 percent 11.44 percent 11.85 percent
Inventive Response has bonds outstanding that mature in 8.5 years, have a 4 percent coupon, and pay interest annually. These bonds have a face value of $1,000 and a current market price of $1,180.30. What is the company’s after-tax cost of debt if its tax rate is 21 percent? 1.35 percent 1.70 percent 2.15 percent 2.65 percent 3.40 percent Therapeutic Solutions Inc. just paid an annual dividend of $1.45 per share last year. The market price of the stock is $26.30 and the growth rate is 5 percent. What is the firm’s cost of equity? 10.51 percent 10.79 percent 11.06 percent 11.44 percent 11.85 percent
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Inventive Response has bonds outstanding that mature in 8.5 years, have a 4 percent coupon, and pay interest annually. These bonds have a face value of $1,000 and a current market price of $1,180.30. What is the company’s after-tax cost of debt if its tax rate is 21 percent?
1.35 percent
1.70 percent
2.15 percent
2.65 percent
3.40 percent
Therapeutic Solutions Inc. just paid an annual dividend of $1.45 per share last year. The market price of the stock is $26.30 and the growth rate is 5 percent. What is the firm’s
10.51 percent
10.79 percent
11.06 percent
11.44 percent
11.85 percent
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