individual or component costs of capital) your firm is considering a new investment proposal and would like to calculate its weighted average cost of capital. to help in this, compute the cost of capital for the firm for the following: a. a bond that has a $ par value (face value) and a contract or coupon interest rate of percent that is paid semiannually. the bond is currently selling for a price of $ and will mature in years. the firm's tax rate is percent. b. if the firm's bonds are not frequently traded, how would you go about determining a cost of debt for this company? c. a new common stock issue that paid a $ dividend last year. the par value of the stock is $, and the firm's dividends per share have grown at a rate of percent per year. this growth rate is expected to continue into the foreseeable future. the price of this stock is now $. d. a preferred stock paying a percent dividend on a $ par value. the preferred shares are currently selling for . e. a bond selling to yield percent for the purchaser of the bond. the borrowing firm faces a tax rate of percent.
