ACC – Crypton Electronics

$8.00

Description

Crypton Electronics has a capital structure consisting of 41% common stock and 59% debt. A debt issue of $1000 par value, 5.6% bonds that mature in 15 years and pay annual interest will sell for $974. Common stock of the firm is currently selling for $30.01 per share and the firm expects to pay $2.19 dividend next year. Dividends have grown at the rate of 5.4% per year and are expected to continue to do so for the forseeable future. What is Crypton’s cost of capital where the firm’s tax rate 30%?

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