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Fast Cash Limited has the following information and a tax rate of 30 percent. . Debt 700, 8 percent coupon bonds outstanding, $1,000 par value, 10 years to maturity, selling for 95 percent of par, the bonds make semi-annual payments Common stock 350,000 shares outstanding, selling for $60 per share; the beta is 1.05 Preferred stock 8,000 shares of 6 percent preferred stock outstanding, currently selling for $115 per share Market 7 percent market risk premium and 4 percent risk-free rate Determine the company’s WACC by computing the follow:
1. Total Market value for the company.
2. After-tax Cost of Debt
3. Cost of Common Stock
4. Cost of Preferred Stock
5. WACC
For each of the following coverages briefly describe the type of coverage provided and give an example of a loss that would be covered.
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