FR Berhad has 6.5 million shares of common stock outstanding with a market price of RM14...

 

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FR Berhad has 6.5 million shares of common stock outstanding with a market price of RM14 per share. This company has a market value of RM10mil outstanding preferred stock. Their corporate bonds outstanding is 25,000 with face value of RM1000 and selling at 90% of face value on the bond market. The cost of equity is 14%, the cost of preferred is 10% and the pre-tax cost of debt is 7.5%. Their marginal corporate tax rate is 30%. (1) Calculate the market value for common stock preferred stock, corporate bond and firm. ii) Calculate the firm's Weightage Average Cost of Capital (WACC) Mira a CFO of a multinational firm from Europe is considering to lease a building in Bayan Lepas free trade zone. As finance manager advise CFO on the types of leases available in Malaysia. FR Berhad has 6.5 million shares of common stock outstanding with a market price of RM14 per share. This company has a market value of RM10mil outstanding preferred stock. Their corporate bonds outstanding is 25,000 with face value of RM1000 and selling at 90% of face value on the bond market. The cost of equity is 14%, the cost of preferred is 10% and the pre-tax cost of debt is 7.5%. Their marginal corporate tax rate is 30%. (1) Calculate the market value for common stock preferred stock, corporate bond and firm. ii) Calculate the firm's Weightage Average Cost of Capital (WACC) Mira a CFO of a multinational firm from Europe is considering to lease a building in Bayan Lepas free trade zone. As finance manager advise CFO on the types of leases available in Malaysia.

Answer rating: 100% (QA)

To calculate the market value of the common stock preferred stock corporate bond and firm we need to use the given information 1 Market value of commo... View the full answer