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(Weighted average cost of capital)Crypton Electronics has a capital structure consisting of 38 percent common stock and 62 percent debt. A debt issue..

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​(Weighted average cost of​ capital)  Crypton Electronics has a capital structure consisting of

38 percent common stock and 62percent debt. A debt issue of $1,000par​ value, 5.9 percent bonds that mature in 15years and pay annual interest will sell for $980.

Common stock of the firm is currently selling for $30.37 per share and the firm expects to pay a $2.33

dividend next year. Dividends have grown at the rate of 5.3percent per year and are expected to continue to do so for the foreseeable future. What is​ Crypton’s cost of capital where the​ firm’s tax rate is

30percent?

a. The​ after-tax cost of debt is

​(Round to two decimal​ places.)

b.  The cost of common equity is

​(Round to two decimal​ places.)

c. ​ Crypton’s cost of capital is

​(Round to three decimal​ places.)

 
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