Question: I only need question 3 please and explain it. Thank you 1) The current stock price for Firm D is $100 while the next dividend
I only need question 3 please and explain it. Thank you
1) The current stock price for Firm D is $100 while the next dividend is $10. Suppose that the dividend is expected to grow at 10% every year. Figure out the cost of equity for Firm D based on dividend growth model. (30points) 2) Figure out the cost of debt if the bond price for Firm D is $928 for the 5-year bond with a par value of $1,000 and a coupon rate of 10% paid annually (30points) 3) The tax rate is 50%. Firm D has a Debt-to-Equity ratio (D/E) of 200\%. i) Figure out the debt-to-firm value (D/V) using Debt-to-Equity ratio (D/E). ii) Figure out the weighted average cost of capital of Firm D (WACC). (40points)
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