firm z has issued 1000000 bonds. each bond is priced at $929 and has a face value of $1000. it pays annual coupon payments and has a coupon rate of 3%. the bonds will mature in 20 years. stock price of firm z is $10, and there are 50 million shares outstanding. there are 2 million shares of preferred stock, whoch offers $2 dividend and is priced at $40. equity beta of firm z is 1.5 and current market portfolio yields 8% and the risk free rate is 2%. corporate tax rate is 30%. find the costs of debt, equity, preferred stock and WACC
firm z has issued 1000000 bonds. each bond is priced at $929 and has a face value of $1000. it pays annual coupon payments and has a coupon rate of 3%. the bonds will mature in 20 years. stock price of firm z is $10, and there are 50 million shares outstanding. there are 2 million shares of preferred stock, whoch offers $2 dividend and is priced at $40. equity beta of firm z is 1.5 and current market portfolio yields 8% and the risk free rate is 2%. corporate tax rate is 30%. find the costs of debt, equity, preferred stock and WACC
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 15P
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firm z has issued 1000000 bonds. each
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