Reference no: EM132062173

MTP currently has outstanding 12-year semiannual 7% coupon bond; the current market price is $1075. What is MTP’s cost of debt? MTP’s beta is 1.15, the 20-year T-bond has a YTM of 3.25%, and the market risk premium is 7.5%. What is MTP’s cost of common stock? MTP’s preferred dividend is $3.75 dollar and the price of MTP’s preferred stock is $50. What is MTP’s cost of preferred stock? MTP has earning per share (EPS) of $3.8, and MTP paid $1.6 in dividend per share. Given MTP’s ROE is 9%, what is MTP’s growth rate for common stock? 6 years ago, MTP issued $20 million bond at par. Assume this is the only bond that MTP has now. What is the market value of debt for MTP? Assume MTP’s dividend will continue to growth as the same pace as before, what is MTP’s share price should be? Assume MTP has 3.25 million common shares outstanding, what is the market value of common stock? Assume MTP has $8 million preferred stock, what are market value weighted for debt, preferred stock and common stock? What is MTP’s cost of capital? Assume MTP’s marginal tax rate is 25%. If MTP is considering a new project for $50 million. They can borrow $15 million from debt, $5 million preferred stocks, and issue the remaining in common stock. Assume MTP will carry the same cost for each source of capital, what is MTP’s cost of capital on this new project? Assume the project will produce $14m in the first year, $16m in the second year, $18m in the third year, and $21m in the fourth year. Then MTP plans to stop the project at the end of year 4. Assume the cost for the project is $50m, what is the NPV for this project? What is IRR for the project?