4. BCDE has preferred shares outstanding and pays a $1 dividend per share and is currently...

 

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4. BCDE has preferred shares outstanding and pays a $1 dividend per share and is currently selling for $12 per share. a. What is BCDE's cost of preferred stock? b. If BCED must pay an underwriting fee of 7% to issue new shares of preferred stock, how much is BCDE's cost of preferred stock? 5. Using the CAPM formula, what is the cost of BCDE's equity if it has a Beta of 1.2, a market return of 7%, and a risk-free rate of 2%? 6. Assume the following information and calculate the cost of debt and cost of equity for CDE: Its tax rate is 30%, it pays 10% interest on debt, its common stock price is $12, growth rate of equity is 12%, and current dividend is $.50. Additionally, calculate the WACC if CDE would like to maintain 24% debt and 76% equity. Cost of debt. Cost of equity WACC 4. BCDE has preferred shares outstanding and pays a $1 dividend per share and is currently selling for $12 per share. a. What is BCDE's cost of preferred stock? b. If BCED must pay an underwriting fee of 7% to issue new shares of preferred stock, how much is BCDE's cost of preferred stock? 5. Using the CAPM formula, what is the cost of BCDE's equity if it has a Beta of 1.2, a market return of 7%, and a risk-free rate of 2%? 6. Assume the following information and calculate the cost of debt and cost of equity for CDE: Its tax rate is 30%, it pays 10% interest on debt, its common stock price is $12, growth rate of equity is 12%, and current dividend is $.50. Additionally, calculate the WACC if CDE would like to maintain 24% debt and 76% equity. Cost of debt. Cost of equity WACC

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