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Crypton Electronics has a capital structure consisting of 35% common stock and 65% debt. A debt issue of 1,000 par value, 6.5% bonds that mature in 15 years and pay a annual interest will sell for $973. Common stock of the firms is currently seilling for $30.97 per share and the fir, expects to pay $2.26 dividend next year. Dividends have grown at the rate of 5.2% per year and are expected to continue to do so for the foreseeable future.

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Question: What is Crypton's cost of capital where the firm's tax rate is 30%.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91168136

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