Reference no: EM131126097

Calculate the after-tax east of debt under each of the following conditions:
a. roc of 13%. tax rate of 0%
b. rd of 13%, tax rate of 20% rd of 13%. tax rite of 33%
U. hxorporated's currently outstanding 11% coupon bonds have a yield to maturity of 8%. U. believes it could issue new bonds at par that would provide a similar yield to maturity. If its marginal tax ram is 35%, what is LL's after-tax cost of debt?

Duggins Veterinary Supplies an issue perpetual palmed stock at an price of $50 a sharc with an annual dividend of $430 a share. Ignoring flotation costs. what is the company, cost of preferred stock. rp,?

Bummed 'tech plans to issue some $60 par preferred stock with a 6% dIvklend. A similar stock is selling on the market for 570. Bummed must pay flotation costs of 3% of the issue price. What is the cost of the p.x1,41 stock?

Summerdahl Resort's common stock S currently trading at $36 a Mart The stock is expected In pay a dividend of $3.00 a share at the end of the watt (D, = $3.03). and the dividend is expected to grow at a sealant rate of 5% a you. What is its cost of common equity?

Booker Book Stores has a beta of 08. The yield on a 3-month T-bill is 496, and the yield on a 10-year T.bond is 6%. The market risk premium Is 5.5%, and the return on an average stock In the market last year was 15%. What Is the estimated cost of common equity using the CAPM?

Shi Importers's balance sheet slums: $300 million in debt. S50 million in preferred stock. and $250 milion in total summon equity. Shi's tax rate is 40%. re - 6%, - 5.8%, and r, -
If Ski has a target capital structure of 30% debt. 5% preferred stmt. and 65% common stock what is is WAOL?

David Ortiz Motors has a target capital structure of 40% debt and 60% equity. 'Ile yield to maturity on the company's outstanding bonds Is 9%. and the company's tax rate is 40%. Ortit's CFO has calculated the company's WACC as 9.96%. What is the company's cost of equity capital?

A company's 6% coupon rate. semiannual payment. 51.000 par value bond that matures in 30 ran sells at a price of $513.16. The company's federal-plus-sate tax rate is 40%. What is the firm's after-tax component cost of debt for purposes of calculating the WACC? (Hint. Base your answer on the nominal rate.)
The earnings. dividends. and stock price of Shelby Inc. are expected to grow at 7% per year in the future. Shelhy's common stock sells kw $23 per share. its last dividend was $2.00. and the company will pay a disidmd of 52.14 at the end of the current year.
a. Using the discounted cash flow approach. what is its cost of equity?

b. If the firm's beta is 1.6. the risk-free rate is 9%, and the expected return on the market is 13%, then what would be the fimi's cost of equity based on the CAPS' approach?