Laura has $10 million in invested capital, $2 million in EBIT, and is in the 50%...

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Laura has $10 million in invested capital, $2 million in EBIT, and is in the 50% federal-plus-state tax bracket. Laura has a 30% debt-to-capital ratio and pays 10% on its debt. What is the ROE for Laura? Question 2 KSS has $1000 par value bonds with a 9% coupon rate and coupons paid semi-annually that mature in 25 years. The bonds are selling for $1,050. KSS has an average tax rate of 30%. KSS is in the 40% marginal tax bracket. What is the after-tax cost of debt? Question 3 KSS common stock has a beta of 1.2. The market long term expected return is 12% and the risk-free rate is 2%. What is the cost of retained earnings? Question 4 CIS common stock currently pays a dividend of $2 per share and trades for $20 per share. New shares can be issued with a $1.5 per share floatation cost CIS is expected to grow at 5%. What is the cost of a new stock issue? Laura has $10 million in invested capital, $2 million in EBIT, and is in the 50% federal-plus-state tax bracket. Laura has a 30% debt-to-capital ratio and pays 10% on its debt. What is the ROE for Laura? Question 2 KSS has $1000 par value bonds with a 9% coupon rate and coupons paid semi-annually that mature in 25 years. The bonds are selling for $1,050. KSS has an average tax rate of 30%. KSS is in the 40% marginal tax bracket. What is the after-tax cost of debt? Question 3 KSS common stock has a beta of 1.2. The market long term expected return is 12% and the risk-free rate is 2%. What is the cost of retained earnings? Question 4 CIS common stock currently pays a dividend of $2 per share and trades for $20 per share. New shares can be issued with a $1.5 per share floatation cost CIS is expected to grow at 5%. What is the cost of a new stock issue?

Answer rating: 100% (QA)

Answer 1 Lauras net income before taxes can be calculated as EBIT 1 tax rate 2 million 1 05 1 millio... View the full answer