Attachment # 00006120 - Discussion_6.xlsx
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Suppose the company is expected to pay a divided of $2.5 and the required rate of return is 10% and the growth rate is 4%. What is the price of the stock after 5 years? after 10 years? after 12 years?Suppose the company just paid a divided of $2.5 and the required rate of return is 10% and the growth rate is 4%. What is the price of the stock after 5 years? after 10 years? after 12 years?ABC’s stock is currently selling for $60 per share. The firm is expected to pay a dividend of $3.60. If the cost of equity is 9%, compute the growth rate.If the market value of debt is $100,000, market value of preferred stock is $300,000, and market value of common equity is $500,000, what is the weight of debt? What is the weight of preferred stock? What is the weight of common equity?ABC Industries will pay a dividend of $2 next year on their common stock. The company predicts that the dividend will increase by 5% each year indefinitely. What is the dividend yield if the stock is selling for $50 a share? What is the required rate of return? ABC Inc.'s perpetual preferred stock sells for $100 per share, and it pays an $5 annual dividend. What is the company's cost of preferred stock?ABC Inc.'s perpetual preferred stock sells for $100 per share, and it pays an $5 annual dividend. If the company were to sell a new preferred issue, it would incur a flotation cost of $10 per share. What is the company's cost of preferred stock?The target capital structure for ABC Company is 20% debt, 40% preferred, and 40% common equity. The before-tax cost of debt is 3.50%, the yield on the preferred is 8%, the cost of common stock is 15%, and the tax rate is 30%. What is the WACC?ABC, Inc., has 1,000 shares of common stock outstanding at a price of $150 a share. They also have 250 shares of preferred stock outstanding at a price of $225 a share. There are 1000, 8 percent bonds outstanding that are priced at $960. The bonds mature in 10 years and pay interest semiannually. What is the capital structure weight of common stock? What is the weight of preferred stock? What is the weight of debt?Continuation of Problem #6: suppose the before-tax cost of debt is 7%, cost of preferred stock is 10%, the cost of common equity is 15%, and the tax rate is 30%, what is the WACC?A company's 6% coupon rate, semiannual payment, $1,000 par value bond that matures in 30 years sells at a price of $915.16. The tax rate is 40%. What is the before-tax cost of debt? What is the after-tax cost of debt?The dividends are expected to grow at 7% per year in the future. ABC's common stock sells for $23 per share and its last dividend was $2. What is the cost of equity?ABC Inc.'s perpetual preferred stock sells for $100 per share, and it pays an $10 annual dividend. If the company were to sell a new preferred issue, it would incur a flotation cost of $4 per share. What is the company's cost of preferred stock for use in calculating the WACC?The ABC Company has a cost of equity of 21%, a pre-tax cost of debt of 10% percent, and a tax rate of 30 percent. What is the firm’s weighted average cost of capital if the proportion of debt is 40%?You were hired as a consultant to ABC Company, whose target capital structure is 50% debt, 35% preferred, and 15% common equity. The before-tax cost of debt is 8%, the yield on the preferred is 10%, the cost of common stock is 15%, and the tax rate is 25%. What is the WACC?ABC, Inc., has 1000 shares of common stock outstanding at a price of $50 a share. They also have 100 shares of preferred stock outstanding at a price of $45 a share. There are 200, 8 percent bonds outstanding that are priced at $89. The bonds mature in 16 years and pay interest semiannually. What is the capital structure weight of the common stock? What is the capital structure weight of preferred stock? What is the capital structure weight of debt?
3 Problem Sets- Multiple Questions Per Problem Set - Finance Problems- Due by Tuesday, June 2, 2015

3 Problem Sets- Multiple Questions Per Problem Set - Finance Problems- Due by Tuesday, June 2, 2015

Question # 00073916 Posted By: TLP Updated on: 06/01/2015 05:07 PM Due on: 06/02/2015
Subject Finance Topic Finance Tutorials:
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