1. Your company issue the common shares of Cnd$50/share, 2 million shares outstanding; Your company Beta is 2 and market risk free rate is 5% at this moment, and expected market return is 15%; 2. Your company issue the bond at the current quote of 900; Your coupon payment rate is 8%, while payment term is semi annual; the bond tenor is 20years; Your bond face value is 100million; 3. Your company also issue some preferred stocks at cnd$70/share, with dividend payment of cnd7/share, total amount of issue is 100million; Your corporate tax rate is 30%;
Your company is asking you as a CFO to consider your capital costs for your long term investment projects. As you collect the recent capital information as the follows:
1. Your company issue the common shares of Cnd$50/share, 2 million shares outstanding; Your company Beta is 2 and market risk free rate is 5% at this moment, and expected market return is 15%;
2. Your company issue the bond at the current quote of 900; Your coupon payment rate is 8%, while payment term is semi annual; the bond tenor is 20years; Your bond face value is 100million;
3. Your company also issue some
Your corporate tax rate is 30%;
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