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Crypton Electronics - Cost of Capital - 2 Jul, 2012

Crypton Electronics has a capital structure consisting of 44% common stock and 56% debt. A debt issue of $1,000 par value, 6.4% bonds that mature in 15 years and pay annual interest will sell for $976. Common stock of the firm is currently selling for $29.69 per share and the firm expects to pay $2.23 dividend next year. Dividends have grown at the rate of 4.6% per year and are expected to continue to do so for the foreseeable future. What is Cryptons cost of capital where the firms tax rate is 30%.



Category : Financial Management

Search Keywords :
Crypton , Electronics , Cost , Capital , Debt , Equity , Dividends 


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Answer  - 2 Jul, 2012
Please see the excel attachment....


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