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Lee Manufacturing (LM) has 20,000 bonds outstanding with a 6.30 percent coupon rate(semi-annual coupon payments) and 12 years left to maturity. The bonds sell for $1028.50. LM's common stock has a beta of 0.8. The 10-year Treasury-Bond rate is currently 2.1 percent, and historically, the market has earned 7% more per year than the 10-year Treasury rate. The firm has 1,000,000 shares of common stock outstanding at a market price of $36.48 a share(book value of $12 per share). The company's marginal tax rate is 35 percent.
Problem a. What is the before-tax cost of debt and what is the after-tax cost of debt?
Problem b. What is the cost of common stock?
Problem c. What is the weighted average cost of capital for Lee Manufacturing?
The prevailing interest for similar securities is at 11%, What is the unrealized holding gain loss to be recognized in the balance sheet as of December 31, 2019
Utilize the included resources,completetax Form 1065. - You are provided with the financial reports along with the supplemental information that provides the details required to prepare a tax return for your new tax client - Phoenix Medical, LLC.
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Frazer Corporation purchased 60 percent of Minnow Corporation’s voting common stock on January 1, 20X1. On December 31, 20X5, Frazer received $264,000 from Minnow for a truck Frazer had purchased on January 1, 20X2, for $334,000. Prepare the workshee..
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