The GiN Corp. is expected to pay a dividend of $3 which is expected to grow at 2% for a foreseeable future. The stock of the GİN Corp. is currently selling at a market price of $40. The company recently expanded its operations by issuing 10-year Corporate bond at par value ($1,000) which pays an annual coupon payment of $80. If the debt-equity ratio of the company is 0.40 and the corporate tax rate is 30%, what is the weighted average cost of capital of the company? Calculate the weighted average cost of capital. (A)The weighted average cost of capital is 9.50% (B) The weighted average cost of capital is 8.39% (C) The weighted average cost of capital is 8.00% (D)The weighted average cost of capital is 5.60%

The GiN Corp. is expected to pay a dividend of $3 which is expected to grow at 2% for a foreseeable future. The stock of the GİN Corp. is currently selling at a market price of $40. The company recently expanded its operations by issuing 10-year Corporate bond at par value ($1,000) which pays an annual coupon payment of $80. If the debt-equity ratio of the company is 0.40 and the corporate tax rate is 30%, what is the weighted average cost of capital of the company? Calculate the weighted average cost of capital. (A)The weighted average cost of capital is 9.50% (B) The weighted average cost of capital is 8.39% (C) The weighted average cost of capital is 8.00% (D)The weighted average cost of capital is 5.60%

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter15: Dividend Policy

Section: Chapter Questions

Problem 4P

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The Gin Corp. is expected to pay a dividend of $3 which is expected to grow at 2% for aforeseeable future. The stock of the GiN Corp. is currently selling at a market price of$40. The company recently expanded its operations by issuing 10-year Corporate bond atpar value ($1,000) which pays an annual coupon payment of $80. If the debt-equity ratioof the company is 0.40 and the corporate tax rate is 30%, what is the weighted averagecost of capital of the company?Calculate the weighted average cost of capital.
The GiN Corp. is expected to pay a dividend of $3 which is expected to grow at 2% for a foreseeable future. The stock of the GiN Corp. is currently selling at a market price of $40. The company recently expanded its operations by issuing 10-year Corporate bond at par value ($1,000) which pays an annual coupon payment of $80. If the debt-equity ratio of the company is 0.40 and the corporate tax rate is 30%, what is the weighted average cost of capital of the company? Calculate the weighted average cost of capital. The weighted average cost of capital is 9.50% The weighted average cost of capital is 5.60% The weighted average cost of capital is 8.39% The weighted average cost of capital is 8.00%
The Gin Corp. is expected to pay a dividend of $3 which is expected to grow at 2% for aforeseeable future. The stock of the GiN Corp. is currently selling at a market price of$40. The company recently expanded its operations by issuing 10-year Corporate bond atpar value ($1,000) which pays an annual coupon payment of $80. If the debt-equity ratioof the company is 0.40 and the corporate tax rate is 30%, what is the weighted averagecost of capital of the company?Calculate the weighted average cost of capital.(A) The weighted average cost of capital is 9.50%(B) The weighted average cost of capital is 8.39%(C) The weighted average cost of capital is 8.00%(D) The weighted average cost of capital is 5.60%
The GiN Corp. is expected to pay a dividend of $3 which is expected to grow at 2% for a foreseeable future. The stock of the GİN Corp. is currently selling at a market price of $40. The company recently expanded its operations by issuing 10-year Corporate bond at par value ($1,000) which pays an annual coupon payment of $80. If the debt-equity ratio of the company is 0.40 and the corporate tax rate is 30%, what is the weighted average cost of capital of the company? Calculate the weighted average cost of capital. (A) The weighted average cost of capital is 9.50% (B) The weighted average cost of capital is 8.39% (C) The weighted average cost of capital is 8.00% (D) The weighted average cost of capital is 5.60%
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