Dividends have grown at the rate of 51 per year and are


Crypton Electronics has a capital structure consisting of 35% common stock and 65% debt. A debt issue of $1,000 par value, 6.1% bonds that mature in 15 years and pay annual interest will sell for $978. Common stock of the firm is currently selling for $29.44 per share and the firm expects to pay a $2.17 dividend next year. Dividends have grown at the rate of 5.1% per year and are expected to continue to do so for the forseeable future. What is Crypton's cost of capital where the firm's tax rate is 30%.

Request for Solution File

Ask an Expert for Answer!!
Finance Basics: Dividends have grown at the rate of 51 per year and are
Reference No:- TGS0614895

Expected delivery within 24 Hours