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FIN 302 - Montafiori Inc. has a target capital structure (in market values) of 60% debt and 40% equity.

Question # 00676261 Posted By: katetutor Updated on: 04/24/2018 08:32 AM Due on: 04/24/2018
Subject Foreign Languages Topic Albanian Tutorials:
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Montafiori Inc. has a target capital structure (in market values) of 60% debt and 40% equity. The firm's debt consists of 8 year, annually payable bonds with a coupon rate of 7%, and the bonds are actually traded at 106% of par value. 
Montafiori's stock currently sells for $100 per share and the last dividend paid (=D0) was $5.00. Investors expect the dividend to grow indefinitely at a constant rate of 10% per year. The company's tax rate is 40%. What is the cost of equity? What is the WACC?
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  1. Tutorial # 00675429 Posted By: katetutor Posted on: 04/24/2018 08:33 AM
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    The solution of FIN 302 - Montafiori Inc. has a target capital structure (in market values) of 60% debt and 40% equity....
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