Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Use the following data for the Sara Company to calculate the cost of common stocks (Rs), the cost of Preferred stocks (Rps), and the cost of Debt: (Rd)?
Item | Symbol | Value |
Risk Free Rate | Rf | 7% |
Stock Risk | B | 1.5 |
Market Return | Rm | 25% |
Interest Rate for Debt | Rd (B.T) | 9% |
TAX rate | T | 5% |
D(ps) | 10 | |
Preferred Stock Price | P(ps) | 100 |
floatation cost ps | FC | $4 |
The cost of Preferred stocks: (Rps)?
The cost of Debt: (Rd)?
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