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XYZ company has 10 year bonds issues six years ago. The bonds have a current selling price of 1036.05. They have a quarterly payment of 15.00. The company pays a 35% tax rate. The company's dividends have a growth rate of 2% and their next divident will be 2.72. The current price of the stock is 34.00. The company has no preferred stock and is comprised of 40% debt. Use this information to answer parts A-C.

A) What is the cost of Equity?

B) What is the cost of Debt?

C) What was the intrest rate when the bond was issued?

Financial Management, Finance

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