what is the cost of debt after tax? what is the cost of PS what is the cost of common stock? what is the weight of the bond what is the weight of the stock what is the weight of preferred stock what is the WACC? The BEAR Company has 1,500 bondsoutstanding that have a market priceof $990 each. floatation cost is 0.02the bond pays coupon of 0.065semiannually for 24 years. Thecompany also has 5,000 shares ofpreferred stock at a market price of$36 and dividends 0.7 each. Thecommon stock is priced at $28 a shareit is undervalued by $2 and there are36,000 shares outstanding, the stockis expected to pay $1 and will continueto grow at a rate Of 0.07TAXES ARE 0.25

Given information: In the given question, the number of shares, bonds and preference shares are…

what is the cost of debt after tax? what is the cost of PS what is the cost of common stock? what is the weight of the bond what is the weight of the stock what is the weight of preferred stock what is the WACC?

what is the cost of debt after tax? what is the cost of PS what is the cost of common stock? what is the weight of the bond what is the weight of the stock what is the weight of preferred stock what is the WACC?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter12: The Cost Of Capital

Section: Chapter Questions

Problem 4P

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The BEAR Company has 1700 bonds outstanding that have a market price of $1195 each and a face value of $1000. floatation cost is 0.025 the bond pays coupon of 0.065 quarterly for 12 years. The company also has 6,000 shares of preferred stock at a market price of $40 and dividends 2 each par value 20 dollars . The common stock is priced at $23 a share it is undervalued by $1.5 and there are 40000 shares outstanding, par value is 5 dollars the stock is pays $2.6 and will continue to grow at a rate of 0.035 . TAXES ARE 0.4 what is the cost of debt after tax? Answer for part 1 what is the cost of PS Answer for part 2 what is the cost of common stock? Answer for part 3 what is the weight of the bond according to book value method Answer for part 4 what is the weight of the stock according to book value method Answer for part 5 what is the weight of preferred stock according to book value method Answer for part 6 what is the WACC? use the book value method Answer for part 7
The BEAR Company has 2000 bonds outstanding that have a market price of $1195 each and a face value of $1000. floatation cost is 0.015 the bond pays coupon of 0.055 quarterly for 12 years. The company also has 6,000 shares of preferred stock at a market price of $38 and dividends 1.5 each par value 20 dollars . The common stock is priced at $28 a share it is undervalued by $1.5 and there are 60000 shares outstanding, par value is 5 dollars the stock is pays $2.6 and will continue to grow at a rate of 0.07 . TAXES ARE 0.38 what is the cost of debt after tax? Answer for part 1 what is the cost of PS Answer for part 2 what is the cost of common stock? Answer for part 3 what is the weight of the bond according to book value method Answer for part 4 what is the weight of the stock according to book value method Answer for part 5 what is the weight of preferred stock according to book value method Answer for part 6 what is the WACC? use the book value method
Y ou are given the following information for Watson Power Co. Assume the company’s tax rate is 21 percent. Debt: 21,000 7 percent coupon bonds outstanding, $1,000 par value, 22 years to maturity, selling for 108 percent of par; the bonds make semiannual payments. Common stock: 540,000 shares outstanding, selling for $72 per share; the beta is 1.18.Preferred stock: 24,000 shares of 4.8 percent preferred stock outstanding, currently selling for $93 per share. The par value is $100 per share. Market: 5 percent market risk premium and 5.3 percent risk-free rate. What is the company's WACC?
Nevada Mining Co. has only long term debt of $600. This debt consist of long term bond which has following features: face value is $1000, time to maturity is 40 years, and annual coupon rate is 0.13. These bond is currently traded in the market at a price of $1,505. Regarding the equity, the current stock price of the shares are $59 and the firms has 13 shares outstanding. Nevada Mining Co. is planning to distribute $11 dividend per share and these dividends are expected to grow 0.06 each year. If the tax rate of Nevada Mining Co. is 0.40, calculate the WACC. Show your steps in your calculations. Please answer in detail use formulae step by step answer
Given the following information for Watson Power Co., find the WACC. Assume the company’s tax rate is 21%. Debt: 15,000 bonds with a 5.8 percent coupon outstanding, $1,000 par value, 25 years to maturity, selling for 108 percent of par; the bonds make semiannual payments Common Stock: 575,000 shares outstanding, selling for $64 per share; the beta is 1.09. Preferred Stock: 35,000 shares of 2.8 percent preferred stock outstanding, currently selling for $65 per share. Market: 7 percent market risk premium and 3.2 percent risk-free rate. Please complete on excel and show excel formulas!
You are given the following information for the Buster Bronco company. There are 9700 bonds outstanding with a 7 percent coupon, $1,000 par value, 21 years to maturity, semiannual payments, and are selling for 105 percent of par. There are 2300 shares of 4.5 percent preferred stock outstanding with a $100 par value and a current price of $97 per share. There are 57,000 shares of common stock outstanding, trading at $73 per share, with a 1.46 beta. The United States has a 21% corporate tax rate, a T-bill return of 4.78 percent, and a 14.5% expected equity market return What is the cost of preferred equity? (percentage)
Filer Manufacturing has 5,685,822 shares of common stock outstanding. The current share price is $38.15, and the book value per share is $8.77. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $58,687,458, has a 0.05 coupon, matures in 10 years and sells for 83 percent of par. The second issue has a face value of $58,030,315, has a 0.06 coupon, matures in 20 years, and sells for 92 percent of par. The most recent dividend was $0.66 and the dividend growth rate is 0.04. Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 0.33. What is Filer's WACC? Enter the answer with 4 decimals (e.g. 0.2345)
Market Basket, Inc., has 125,000 shares of common stock outstanding at a price of $43 a share. They also have 25,000 shares of preferred stock outstanding at a price of $55 a share. There are 10,000, 8 percent bonds outstanding that are priced at $990. The bonds mature in 16 years and pay interest semiannually. What is the capital structure weight of the preferredstock?
Filer Manufacturing has 4,766,598 shares of common stock outstanding. The current share price is $48.72, and the book value per share is $3.5. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $67,516,398, has a 0.06 coupon, matures in 10 years and sells for 98 percent of par. The second issue has a face value of $66,573,884, has a 0.05 coupon, matures in 8 years, and sells for 95 percent of par. What is Filer's weight of debt on a market value basis? Enter the answer with 4 decimals (e.g. 0.2345)
Filer Manufacturing has 9,839,969 shares of common stock outstanding. The current share price is $57.28, and the book value per share is $4.24. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $53,310,475, has a 0.07 coupon, matures in 13 years and sells for 81 percent of par. The second issue has a face value of $67,670,598, has a 0.07 coupon, matures in 8 years, and sells for 85 percent of par. What is Filer's weight of equity on a market value basis? Enter the answer with 4 decimals (e.g. 0.2345)
• The company has 81,000 bonds with a 30-year life outstanding, with 15 years untilmaturity. The bonds carry a 10 percent semi-annual coupon, and are currently sellingfor $899.24.• The company also has 150,000 shares of $100 par, 9% dividend perpetual preferredstock outstanding. The current market price is $90.00. Any new issues of preferredstock would incur a 3.6% per share flotation cost.• The company has 5 million shares of common stock outstanding with a current priceof $29.84 per share. The stock exhibits a constant growth rate of 10 percent. The lastdividend (D0) was $.80. New stock could be sold with flotation costs of 6.7% pershare.• The risk-free rate is currently 6 percent, and the rate of return on the stock market as awhole is 13 percent. Your stock’s beta is 1.18.• Your firm does not use notes payable for long-term financing.• Your firm’s federal + state marginal tax rate is 28%.• For all projects, the reinvestment rate shall be 9.5%…
The company has 81,000 bonds with a 30-year life outstanding, with 15 years untilmaturity. The bonds carry a 10 percent semi-annual coupon, and are currently sellingfor $899.24.• The company also has 150,000 shares of $100 par, 9% dividend perpetual preferredstock outstanding. The current market price is $90.00. Any new issues of preferredstock would incur a 3.6% per share flotation cost.• The company has 5 million shares of common stock outstanding with a current priceof $29.84 per share. The stock exhibits a constant growth rate of 10 percent. The lastdividend (D0) was $.80. New stock could be sold with flotation costs of 6.7% pershare.• The risk-free rate is currently 6 percent, and the rate of return on the stock market as awhole is 13 percent. Your stock’s beta is 1.18. • Your firm does not use notes payable for long-term financing.• Your firm’s federal + state marginal tax rate is 28%.• For all projects, the reinvestment rate shall be 9.5%…