What is Crisp's after-tax cost of debt? (1 mark) Answer: 5.0% What is the market value...

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What is Crisp's after-tax cost of debt? (1 mark) Answer: 5.0% What is the market value of Crisp's bonds? (1 mark) Answer: What is the market value of Crisp's preference shares? (1 mark) Answer: What is Crisp's cost of preference shares? (1 mark) Answer: What is the market value of Crisp's ordinary shares? (1 mark) Answer: What is Crisp's cost of ordinary shares? (1 mark) Answer: Crisp's capital structure is made up of; DEBT Bonds CAPITAL STRUCTURE EQUITY Preference Shares Ordinary Shares Crisp Ltd. has 100,000 bonds outstanding with a face value of $100 each. These bonds have 10 years to maturity and pay an annual coupon of 8%. Crisp's statutory corporate tax rate is 30%. Moody's Corporation is one of a big rating agency which has given Crisp Ltd. a debt rating of AA. The following table shows the risk premium available in the market based on debt ratings: The risk-free rate offered by the government on bonds is 1.5%. Debt rating Risk premium AAA 5.0% AA 6.5% BBB BB 7.2% 7.5% Crisp Ltd. has issued 4 million preference shares, which pay an annual dividend per share of $0.60. They are currently trading at $5 each. Crisp Ltd. has issued 10 million ordinary shares, which are currently trading at $6 each. Shareholders are to receive a dividend of $0.75 per share in the current year, and this dividend is estimated to grow at a constant rate of 4% in perpetuity. NOTE: Round all dollar amounts to the nearest dollar and all percentages to two decimal places. What is Crisp's after-tax cost of debt? (1 mark) Answer: 5.0% What is the market value of Crisp's bonds? (1 mark) Answer: What is the market value of Crisp's preference shares? (1 mark) Answer: What is Crisp's cost of preference shares? (1 mark) Answer: What is the market value of Crisp's ordinary shares? (1 mark) Answer: What is Crisp's cost of ordinary shares? (1 mark) Answer: Crisp's capital structure is made up of; DEBT Bonds CAPITAL STRUCTURE EQUITY Preference Shares Ordinary Shares Crisp Ltd. has 100,000 bonds outstanding with a face value of $100 each. These bonds have 10 years to maturity and pay an annual coupon of 8%. Crisp's statutory corporate tax rate is 30%. Moody's Corporation is one of a big rating agency which has given Crisp Ltd. a debt rating of AA. The following table shows the risk premium available in the market based on debt ratings: The risk-free rate offered by the government on bonds is 1.5%. Debt rating Risk premium AAA 5.0% AA 6.5% BBB BB 7.2% 7.5% Crisp Ltd. has issued 4 million preference shares, which pay an annual dividend per share of $0.60. They are currently trading at $5 each. Crisp Ltd. has issued 10 million ordinary shares, which are currently trading at $6 each. Shareholders are to receive a dividend of $0.75 per share in the current year, and this dividend is estimated to grow at a constant rate of 4% in perpetuity. NOTE: Round all dollar amounts to the nearest dollar and all percentages to two decimal places.