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Business, 26.06.2020 23:01 wolffee895

Given the following, compute the before tax cost of debt: The par value of the firms outstanding 20 year 8% annual coupon debt is 1,000 and the debt currently has a market value of 800. The firm's tax rate is 30%. The current dividend (just paid) is 2.00. The dividend growth rate is 3%. The current stock price is 20.00. New equity flotation costs are 10%. The risk free rate is 4%. The market risk premium (Market return - Risk free rate) is 6%. The security beta is 2.

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Given the following, compute the before tax cost of debt: The par value of the firms outstanding 20...
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