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A balance sheet of the company, total bonds is $3,000,000 (Par $1,000,annual coupon 8%p.a., 4 years to maturity); the equity include preference share $3,000,000 and ordinary shares is $6,000,000; so the total is 12,000,000. the company's bank has advised the interest rate on any new debt finance provided for the projects is 9% p.a. and if the debt issue is of similar risk of same time to maturity and coupon rate. Now, it has 1,000,000 preference share on issue and pay dividend $0.25 per year. the preference shares sell $3.20. Company has 1,000,000 ordinary shares and sell for $3.25 each and expects to pay a dividend of $0.3 per share at the end of next year. Dividends have increase 4%p.a. at an annual rate and will continue in future. Tax rate is 30%.
Could you use dividend growth model to find cost of equity, Could you also show the after tax cost of capital for each source of finance and after-tax weighted average cost of capital for company.
Calculate the effect of the change in the market value of SunTrust's investment in Coke's common stock on SunTrust's 2006. How would your answer to Part a differ if SunTrust classified its investment in Coke's common stock as a trading security?
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Since you are an outstanding entrepreneur student, your university has asked you to give a two hour seminar at the local high school on how to identify an appropriate business model and write an effective business plan. Provide key points detailin..
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