Question: Hi, can you solve question 9 please. I put the other questions in there for reference. QUESTION 6 - What is the after-tax cost of
Hi, can you solve question 9 please. I put the other questions in there for reference.
QUESTION 6 - What is the after-tax cost of debt for a company in the 42% tax bracket with a bond outstanding at 13% maturity? What if the tax bracket is 46%? What if the tax bracket is 38%?
QUESTION 7 - What is the cost of preferred stock if the annual dividend is $8.75, stock price is $12, and the flotation cost is $3? How is the cost of preferred stock impacted if the annual dividend increases to $9? What if the annual dividend decreases to $8.50?
QUESTION 8 - What is the cost of new common stock if the dividend is $2.50, price = $25, flotation cost is $1.75, and the growth rate is 5%? How is the cost of new common stock impacted if the growth rate increases to 7%? What if the growth rate decreases to 3%?
QUESTION 9 - Use the information from the three previous problems above (the initial numbers) to calculate the weighted average cost of capital with the weight of debt being 35%, preferred stock 15%, and common stock 50%.
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
