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ABC would like to expand and have a capital structure of:
10 million preferred stock
30 million debt
60 million common equity
ABC would like to expand, in order to do so they must issue new debt with a 12% coupon rate, $1,000 par value, that have 15 year maturities. The floatation costs are 2% per bond.
Preferred stock will cost ABC 11% after taxes.
ABC's common stock currently sells for $22 a share and next year will pay a quarterly dividend of $0.25 per share. If the stock dividends are expected to continue to grow at a rate of 4% per year for the foreseeable future.
ABC's tax rate is 35%.
Calculate the weighted average cost of capital.
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Blackrock Capital is an investment firm that focuses on opportunities in South America.
You currently own 200 shares of Hanover Co. The stock closed at a price of $22.38 a share today. Tomorrow morning a 10 percent stock dividend will occur. What will be the change in the value of your investment tomorrow assuming there are no other fac..
What is the expected yield to maturity for this bond?
What is the payback period of this investment?
Cooper has one type of common stocks and one type of bond outstanding. The total book value for the common stocks is $10million and the book value per share is $2million. The expected market premium is 12% and the current risk rate is 3%. Cooper equi..
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The relationship between NPV and IRR is such that:
Cost of common stock equity- CAPM. J&M Corporation stock has a beta, b, of 0.8. The risk-free rate is 7% and the market return is 13%. Determine the risk premium on J&M common stock. Determien the required retrun that J&M common stock should provide.
Suppose that the correlation between stocks A and B is Pab = -1, instead of Pab = 0.75.
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