What is the bank cost of preferred

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Reference no: EM132044538

1. The City Street Corporation's common stock has a beta of 1.2. The risk-free rate is 3.5 percent and the expected return on the market is 13 percent. What is the firm's cost of equity? *please show work*

a. 11.4

b. 12.8

c. 14.9

d. 17.6

e. 19.1

2. The outstanding bonds of Tech Express are priced at $989 and mature in 8 years. These bonds have a 6 percent coupon and pay interest annually. The firm's tax rate is 39 percent. What is the firm's after-tax cost of debt?

A 3.01 percent

B 3.22 percent

C 3.35 percent

D 3.77 percent

E 4.41 percent

3. Holdup Bank has an issue of preferred stock with a $5 stated dividend that just sold for $92 per share. What is the bank's cost of preferred?

A 4.60 percent

B 4.64 percent

C 5.39 percent

D 5.43 percent

E 5.54 percent

Reference no: EM132044538

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