Question: "(9-2) After-Tax Cost of Debt
9.2 LL Incorporated’s currently outstanding 11% coupon bonds have a yield to maturity of 8%. LL 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 LL’s after- tax cost of debt?
Question: (9-5) Cost of Equity: DCF
9.5 Summerdale Resort’s common stock is currently trading at $36 a share. The stock is expected to pay a dividend of $3.00 a share at the end of the year (D1 =$3.00), and the dividend is expected to grow at a constant rate of 5% a year. What is its cost of common equity?