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A firm currently has the following capital structure which itintends to maintain. Debt: $1,250,000

A firm currently has the following capital structure which itintends to maintain. Debt: $1,250,000

A firm currently has the following capital structure which itintends to maintain. Debt: $1,250,000 par value of 7.25% bondsoutstanding with an annual before-tax yield to maturity of 6.50% ona new issue. The bonds currently sell for $115 per $100 par value.Common stock: 23,000 shares outstanding currently selling for $45per share. The firm’s beta is 1.75. The rate on 3-month U.S.Treasury bill is 3.50%, and the return on the S & P 500 indexis 12.25%. The firm’s marginal tax rate is 34%. The company has noplans to issue new securities. The after-tax cost of commonstock is:0.18810.15310.12420.1011Please show your work