Use data to complet excel chart, please don't only fill in the orange cells with the correct answer, but also show how you got the formula to get the answer! Tax rate0.2500Parvalue1,000Bond price962.72Bond maturity in years15Bond coupon rate0.0813Bond coupon payment amount81.25Number of compounding periods per year2Cell for "1"1Cell for "-1"-1Yield, semi-annualYield, nominal -- annualizedCost of long-term debt, semi-annualCost of long-term debt, nominal - annualizedPreferred stock par valuePreferred stock dilvidend as percentage1000.0850Preferred stock dividend payments per yearPreferred stock perpetuity price112.00Preferred stock dividendCost of preferred stockCommon stock price25.00Do1.10Common stock growth rate0.06Beta1.2Risk-free rate0.0220Market risk premium0.0375Bond-yield risk premium0.0400Cost of equity CAPMCost of equity DCFCost of equity Bond-Yield+Risk PremiumAverageFlotation cost as percentage0.125Cost of new common equityWeights0.35CostsTarget capital debtTarget capital preferred0.10Target capital common equity0.55WeightsCostsTarget capital debtTarget capital preferred0.350.10Target capital common equity0.55

The question is based on the concept of cost of capital and capital structure of firm. Capital has…

ax rate arvalue ond price 0.2500 1,000 962.72 ond maturity in years 15 ond coupon rate ond coupon payment amount umber of compounding periods per year ell for "1" ell for "-1" leld, semi-annual 0.0813 81.25 1 -1 leld, nominal --- annualized ost of long-term debt, semi-annual ost of long-term debt, nominal --- annualized referred stock par value 100 referred stock dividend as percentage 0.0850 referred stock dividend payments per year 1 referred stock perpetuity price 112.00 referred stock dividend ost of preferred stock ommon stock price 25.00 1.10 ommon stock growth rate 0.06 eta isk-free rate Market risk premium 1.2 0.0220 0.0375 ond-yield risk premium ost of equity CAPM ost of equity DCF 0.0400 ost of equity Bond-Yield-Risk Premium verage lotation cost as percentage 0.125 ost of new common equity Weights Costs arget capital debt arget capital preferred arget capital common equity 0.35 0.10 0.55 Weights Costs arget capital debt arget capital preferred arget capital common equity 0.35 0.10 0.55

ax rate arvalue ond price 0.2500 1,000 962.72 ond maturity in years 15 ond coupon rate ond coupon payment amount umber of compounding periods per year ell for "1" ell for "-1" leld, semi-annual 0.0813 81.25 1 -1 leld, nominal --- annualized ost of long-term debt, semi-annual ost of long-term debt, nominal --- annualized referred stock par value 100 referred stock dividend as percentage 0.0850 referred stock dividend payments per year 1 referred stock perpetuity price 112.00 referred stock dividend ost of preferred stock ommon stock price 25.00 1.10 ommon stock growth rate 0.06 eta isk-free rate Market risk premium 1.2 0.0220 0.0375 ond-yield risk premium ost of equity CAPM ost of equity DCF 0.0400 ost of equity Bond-Yield-Risk Premium verage lotation cost as percentage 0.125 ost of new common equity Weights Costs arget capital debt arget capital preferred arget capital common equity 0.35 0.10 0.55 Weights Costs arget capital debt arget capital preferred arget capital common equity 0.35 0.10 0.55

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter11: Determining The Cost Of Capital

Section: Chapter Questions

Problem 9P: Bond Yield and After-Tax Cost of Debt A companys 6% coupon rate, semiannual payment, 1,000 par value...

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