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Provide excel with formulations or resolution.
ABC Corp's WACC
(a) ABC Corp shares are currently trading at $69.25 each. The yield on the company's debt is 4% and the firm's beta is 0.25. The T-Bill rate is 4% and the expected return on the market (E (kM)) is 11%. The company's target capital structure is 20% debt and 80% equity. The company pays a combined income tax rate of 20%. The GST rate is 13%. What is ABC's cost of equity? Show your work and provide a statement clearly indicating your answer.
(b) Using the information outlined above, calculate ABC's cost of debt (after tax). Show your work and provide a statement clearly indicating your answer.
(c) What is ABC's weighted average cost of capital? Show your work and provide a statement clearly indicating your answer.
(d) ABC's key rival, Neil Corp has a 7 percent preferred stock outstanding that is currently selling for $48 a share. The preferred stock has a $100 par value. The market rate of return is 10 percent and the firm's tax rate is 34 percent. GST is 13%. What is Neil Corp's cost of preferred stock? Show your work and provide a statement clearly indicating your answer.
Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..
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