What is the cost of preferred stock for a company

Assignment Help Finance Basics
Reference no: EM13686170

1. abc, inc has 13 million shares outstanding. the current stock price is $23. the company also has 3 million bonds outstanding. each bond is currently selling for $1,000. the bonds pay $70 coupon per year. cost of equity is !0% and the tax rate is 40%. the company does not have preferred stocks. what is the relevant discount rate the company use to find NPV of a project that has an average risk. basically is asking what is WACC?
2. the stock of xyz currently sells for $67 and has beta of 1.4. its last paid dividend of $1.4. the expected return on the market is 12% and the long term Tbond currently yields 3%. what is the cost of equity for xyz/
3. the company has 3.2 million bonds outstanding selling for $890 each. they are 5% bonds and have 9 years to maturity. what is the after tax cost of debt for the company if the relevant tax rate is 35%?
4. what is the cost of preferred stock for a company if its 3% preferred stock is currently selling for $40?

Reference no: EM13686170

Questions Cloud

Discovered and announced immediately : Discovered and announced immediately
Implement an interest rate risk-management strategy : Implement an Interest Rate Risk-Management strategy
Which investment would you make : How much must you pay each year on a $300,000 mortgage that has a 20 year maturity and a 5% interest rate?
What is the ex-rights price : What is the ex-rights price
What is the cost of preferred stock for a company : What is the cost of preferred stock for a company
Compare the common sized data for pwbi : Compare the common sized data for PWBI to the common sized data for the comparison sample of companies in Case Exhibit
What is the marginal profit : Penny is making pipe cleaner flowers to sell on Etsy for $1 apiece. Penny and her friends become more efficient as they gain practice in flower production. The first 100 flowers cost $1.50 apiece. The next 100 cost $1.25 apiece. The next 100 cost $1...
What is their profit and what is their variable cost : The Shelby Center Lemonade Stand has a fixed cost of $125 and a marginal cost of $0.25. If they sell 800 cups of lemonade at a price of $0.50 per cup, what is their profit? What is their variable cost? What is their marginal profit?
What is the relationship between income and exports : What is the relationship between income and exports?

Reviews

Write a Review

Finance Basics Questions & Answers

  Hot wings inc has an odd dividend policy the company has

hot wings inc. has an odd dividend policy. the company has just paid a dividend of 4 per share and has announced that

  Selection of a project on the basis payback and net present

Selection of a project on the basis Payback and net present value and Which of the two projects should be chosen based on the payback method

  Your uncle promises to give you 550 per quarter for the

your uncle promises to give you 550 per quarter for the next five years starting today. how much is his promise worth

  Devise a hypothetical business situation in which buying a

devise a hypothetical business situation in which buying a lookback call option on a commodity may be a sound strategy

  It has a profit margin of 4 an average collection period of

abc inc. sells all its merchandise on credit. it has a profit margin of 4 an average collection period of 60 days

  What interest deduction can the company take on these bonds

what interest deduction can the company take on these bonds in the first year? In the last year?

  Compute the break-even levels of ebit

Break Even EBIT and Leverage IBM Corporation is comparing two different capital structures. Plan I would result in 1,100 shares of stock and $16,500 in debt.

  How much cash did wing corporation receive from its ipo

The gross spread is $4. After completing their sales efforts the underwriters determine that they were able to sell a total of 33,750 shares. How much cash did Wing Corporation receive from its IPO?

  Compute the exchange exposure faced by the us firm what is

a u.s. firm holds an asset in france and faces the following scenariostate 1state 2state 3stateprobability25252525spot

  Compute the profitability index for each project

Fully explain your logic, how would you decide between these two projects and which would you recommend?

  Calculate the expected rate of return and standard deviation

You are considering investing in a project with the following possible outcomes: Calculate the expected rate of return and standard deviation of returns for this investment.

  The book value of the bond at the end of the fifth year is

an n-year 2000 par-value bond with 9 annual coupons has an annual effective yield of i i gt 0. the book value of the

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd