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    carlene123 Posts: 3, Reputation: 1
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    #1

    Sep 26, 2013, 12:13 PM
    Cost of debt
    Jones industries borrows for 10 years with an annual payment of $100,000. What is the expected interest rate (cost of debt)
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    carlene123 Posts: 3, Reputation: 1
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    #2

    Sep 26, 2013, 12:20 PM
    Cost of equity
    Jones industries has a beta of 1.39. The risk-free rate as measured by the rate on short-term US treasury bill is 3 percent. And the expected return on the overall market is 12 percent. Determine the expected rate of return on Jones's stock (cost of equity). Here are the details

    Jones total assests-$2,000,000
    Long & short-term debt-$600,000
    Common internal stock equity-$400,000
    New common stock equity-$1,000,000
    Total liabilities & equity-$2,000,000
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    carlene123 Posts: 3, Reputation: 1
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    #3

    Sep 26, 2013, 12:25 PM
    Cost of debt formula
    What's the formula for calculating cot of debt? Jones industries borrow $600,000 for 10 years with an annual payment of $100,000.
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