Cost of Debt
The effective interest rate is 6.03%. Effective tax rate is 30% in 2017. Therefore, its cost of debt
is 0.0603 x (1-0.30) = 0.04221 = 4.22%
Total borrowing is 19,913 (in million) as of June 2017.
Cost of Preferred Stock
21CF has not issued Preferred Stock so the cost of preferred stock for 21 CF is zero.
Cost of Common Stock by Capital Asset Pricing Model (CAPM)
The rate of return on long term treasury is 2.61%. These are the average of all outstanding
debts over 10 years.
