A firm has 60000 shares whose current price is 4590 those


A firm has 60,000 shares whose current price is $45.90. Those stockholders expect a return of 14%. The firm has a 3-year loan of $1,900,000 at 7.3%. It has issued 22,000 bonds with a face value of 1000, 20 years left to maturity, semiannual compounding, a coupon interest rate of 7%, and a current price of $925. Using market values for debt and equity, what is the firm's cost of capital:

(c) Before taxes?

(d) After taxes with a tax rate of 34%?

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Business Economics: A firm has 60000 shares whose current price is 4590 those
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