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Question: Your firm is considering a new investment proposal and would like to calculate the weighted average cost of capital. to help in this, compute the cost of capital for the firm for the following:
1. A bond that has a $1,000 par value (face value) and a contract or coupon interest rate of 11.3% that is paid semiannually. The bond is currently selling for a price of $1126 and will mature in 10 years. The firm;s tax rate is 34%. The after-tax cost of debt from the firm is _________%. (Round to two decimal places).
3. A new common stock issue that paid $1.77 dividend last year. The par value of the stock is $15, and the firm's dividends per share have grown at a rate of 7.8% per year. The growth rate is expected to continue onto the foreseeable future. The price of this stock is now 27.33. The cost of common equity for the firm is _______%.(Round to two decimal places)
4. A preferred stock paying a 10.9% dividend on a $129 par value. The preferred shares are currently selling for $153.68. The cost of preferred stock for the firm is____________%.(Round to two decimal places)
5. A bond selling to yield 12.6% for the purchaser of the bond. The borrowing firm faces a tax rate of 34%. The after-tax cost of debt for the firm is _________%. (Round to two decimal places)
Jess sold a piece of equipment she used in her business. The equipment cost Jess $51,500 several years ago and had accumulated depreciation taken in the amount of $20,300. Jess sold the equipment for $35,000.
Should the federal or state government begin with restricting food ads targeted at children? And what about for other products, say toys?
the managers of a food company are interested in determining the effect on their sales of a competitors television
1. Identify and describe three ways that finance companies overcome asymmetric information problems in order to raise financing.
What are your thoughts regarding President Obama's comments on workplace diversity? Provide a resource to validate your thoughts.
what is the target stock price in one year? (do not round intermediate answers, round final answer to 4 decimal places) I cannot seem to get the correct answer for this one. A walk-through would be greatly appreciated.
As the invesment banker, what would be your first actions before offering advice?
The countries of Stabilato and Variato have the following average returns and standard deviation for their stocks ,bond, and short term government securities. What range of returns should you expect to earn 95 percent of the time for ..
Describe Capital budgeting decision based on net present value
What factor or factors make the valuation of common stocks more complicated than the valuation of bonds and preferred stocks?
What is the discounted payback period for these cash flows if the initial cost is $5,900?
dexter instrument companys sales average 3 million per day.a. if dexter could reduce the time between customers mailing
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