DebtoftionCommonStockPreferredStock59,000 bonds with a 5.0% coupon rate,payable annually, 15 years to maturity,selling at $1,050 per bond.554,000 shares of common stockoutstanding. The stock sells for a priceof $76 per share and has a beta of 1.20.215,000 preferred shares outstanding,currently trading at $70.00 per share;with an annual dividend payment of$5.20,MarketThe market risk premium is 13% and therisk free rate is 4%Tax Rate26%Time lefWhat is the after tax cost of debt (Rd)? (Answer as a percentage and round to 2 decimals)Oa. 0.76 %Ob. -0.01 %O c. 7.10%O d. 5.20%O e. 3.35 %

Step 1: The calculation of the cost of debt AB1Face value $ 1,000.00 2Coupon…

Answered: Debt of tion Common Stock Preferred…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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The IPO Investment Bank has the following financing outstanding. Debt: 20,000 bonds with a coupon rate of 12 percent and a current price quote of 110; the bonds have 20 years to maturity. 190, 000 zero coupon bonds with a price quote of 20.5 and 30 years until maturity. Both bonds have a par value of $1,000 and semiannual coupons. Preferred stock: 110,000 shares of 10 percent preferred stock with a current price of $85, and a par value of $100. Common stock: 2,200, 000 shares of common stock; the current price is $71, and the beta of the stock is 1.45. Market: The corporate tax rate is 21 percent, the market risk premium is 5 percent, and the risk - free rate is 2 percent. What is the WACC for the company? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Harnett Computing has 10-year, non-callable, 9.0% semi-annual coupon bonds outstanding. The bonds have a par value of $1,000 and a nominal YTM of 9.42%. What is the bonds' current market price? $937.69 $961.38 $1,038.62 $950.33 $973.17
A 16. Subject:- finance
Solve the word problem on Stocks and bonds. (Round amount to the nearest centavo) • RFÓ Distributor bought 18,800 shares of stocks at P1.43 par value with a preferred quarterly dividend rate of 8.5%. How much is the amount of quarterly dividend?
A firm issues preferred stock that has $70 par value abs pays a 15% annual dividend each year. Firms bankers willing to lay $84/share. Flotation costs equal to $8.45 per share. Determine difference between investors required rate of return and fursns cost of preferred stock.
6. The semi-annual, 10% coupon bonds of Australis Inc. are selling at par. The effective annual rate of these bonds must be equal to: A. 5% B. (1.05)2 - 1 C. 10% D. (1.10)2 - 1 ALPHO Inc. has paid annual dividends of $1.25 and $1.62, over the past two years. Dividends in the future are expected to be $2.00 and $2.45 over the next two years, then grow at a constant rate of 4%. Which one of the following formulas should be used to compute the value of the stock today? P0= D1/(1+k)1+ D2/(1+k)2 + ... + Dn/(1+k)n + Pn/(1+k)n P0= D/k P0= D1/(1+k)n+ g P0= D1/(k-g)
please give me answer in relatable
17. Preferred Stock and WACC The Saunders Investment Bank has the following financing outstanding. What is the WACC for the company? Debt: 40,000 bonds with a coupon rate of 4.9 percent and a current price quote of 106.5; the bonds have 15 years to maturity and a par value of $1,000. 40,000 zero coupon bonds with a price quote of 21.8, 30 years until maturity, and a par value of $10,000. Both bonds have semiannual compunding. 135,000 shares of 3.5 percent preferred stock with a current price of $87 and a par value of $100. 1,900,000 shares of common stock; the current price is $73 and the beta of the stock is 1.15. The corporate tax rate is 23 percent, the market risk premium is 7 percent, and the risk-free rate is 3.6 percent. Preferred stock: Common stock: Market:
Assume that Almond Milk Company has a $1,000 face value bond with a stated coupon rate of 8.18 percent that is convertible into its common stock at $35.77. The bond is selling at $1,096.27 in the market. The common stock is selling for $33.84 and pays a dividend of 0.62 per share. Calculate the payback premium period.
A $1,000 par value bond with an annual coupon rate of 5%, and callable at $1,050, can be converted into 17 shares of common stock. Currently, the common stock sells for $57 and the bond sells for $1,020. How much will this bond be worth upon conversion? Multiple Choice $1,002 $1,020. $1,050. $969 $950
A $1,000 face value, 6.4% coupon bond pays interest semi-annually and matures in ten years. It has a yield-to-maturity of 7.1325%. The bond's price is closest to $920 $1,203 $1,061 $948 2. Pilgrim Corp. stock currently sells for $25 per share? The annual dividend payment is $1.00 per share and earnings per share are $3.00. What is the dividend payout ratio?

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