What is the cost of the preferred stock if the stock trades

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Reference no: EM131527146

1. You work for a company with 30,000 of 4% coupon bonds, 20,000 $50 par $2.50 preferred stock, and 1,000,000 common shares outstanding with a market price of $22.00 per share and a required rate of return of 14%. What is the cost of the preferred stock if the stock trades at $45.00?

2. What is the cost of the debt if it trades at $1022 per bond? All other issues are as in the above problem 12.

3. What is the required rate of return if all is as in problem 2, above except the growth rate is 6% and it pays a dividend of $3.00 this year?

Reference no: EM131527146

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