Reference no: EM132957274

Question - LL Incorporated's currently outstanding 8% coupon bonds have a yield to maturity of 5.5%. LL believes it could issue new bonds at par that would provide a similar yield to maturity. If its marginal tax rate is 25%, what is LL's after-tax cost of debt? Round your answer to two decimal places.

Summerdahl Resort's common stock is currently trading at $35 a share. The stock is expected to pay a dividend of $1.25 a share at the end of the year (D1 = $1.25), and the dividend is expected to grow at a constant rate of 6% a year. What is the cost of common equity? Round your answer to two decimal places.

Booher Book Stores has a beta of 0.5. The yield on a 3-month T-bill is 3% and the yield on a 10-year T-bond is 7%. The market risk premium is 4.5%, and the return on an average stock in the market last year was 15%. What is the estimated cost of common equity using the CAPM? Round your answer to two decimal places.

David Ortiz Motors has a target capital structure of 40% debt and 60% equity. The yield to maturity on the company's outstanding bonds is 10%, and the company's tax rate is 25%. Ortiz's CFO has calculated the company's WACC as 10.8%. What is the company's cost of equity capital? Round your answer to the nearest whole number.