Crypton electronics has a capital structure consisting of 41%common stock and 59% debt. A debt issue of $1000 par value 5.9%bonds that mature in 15 years and pay annual interest will sell$979. Common stock of the firm is currently selling for $29.37 pershare and the firm expects to pay $2.21 dividend next year.Dividends have grown at the rate of 5.2% per year and are expectedto continue to do so for the foreseeable future. What is theCryptons cost of capital where the firms tax rate is 30%?
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