Question: please answer a b c and d thanks !! HBM, Inc has the following capital structure: The common stock is currently selling for $12 a

please answer a b c and d thanks !! HBM, Inc

please answer a b c and d thanks !!

HBM, Inc has the following capital structure: The common stock is currently selling for $12 a share, pays a cash dividend of $0.85 per share, and is growing annually at 8 percent. The preferred stock pays a $9 cash dividend and currently sells for $89 a share. The debt pays interest of 6.0 percent annually, and the firm is in the 30 percent marginal tax bracket. a. What is the after-tax cost of debt? Round your answer to two decimal places. % b. What is the cost of preferred stock? Round your answer to two decimal places. % c. What is the cost of common stock? Assume that the current $0.85 dividend grows by 8 percent during the year. Round your answer to two decimal places. % d. What is the firm's weighted-average cost of capital? Round your answer to two decimal places. %

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

HBM, Inc. has the following capital structure: The common stock is currently selling for $15 a share, pays a cash dividend of $0.75 per share, and is growing annually at 6 percent. The preferred...

please help i am not sure how to answer these What effect will the issue of common stock have on earning per sh? Decrease Increase No effect Increase numerator and decrease denominato Loeb Co. had...

HBM, Inc has the following capital structure: HBM, Inc has the following capital structure: Assets $ 350,000 Debt $ 87,500 Preferred stock 35,000 Common stock 227,500 The common stock is currently...

HBM , Inc has the following capital structure: The common stock is currently selling for $ 1 2 per share, pays a cash dividend of $ 0 . 5 0 per share, and is growing annually at 4 percent. The...

HBM, Inc has the following capital structure: The common stock is currently selling for $12 a share, pays a cash dividend of $0.60 per share, and is growing annually at 6 percent. The preferred stock...

HBM, Inc has the following capital structure: The common stock is currently selling for $12 a share, pays a cash dividend of $0.95 per share, and is growing annually at 7 percent. The preferred stock...

HBM, Inc has the following capital structure: Assets $ 450,000 Debt $ 112,500 Preferred stock 45,000 Common stock 292,500 The common stock is currently selling for $15 a share, pays a cash dividend...

eBook Problem 21-01 HBM, Inc has the following capital structure: Assets $ 350,000 Debt $ 87,500 Preferred stock 52,500 Common stock 210,000 The common stock is currently selling for $17 a share,...

HBM, Inc has the following capital structure: Assets $600,000 Debt $ 150,000 Preferred stock 30,000 Common stock 420,000 The common stock is currently selling for $18 a share, pays a cash dividend of...

cost of capital problem HBM, Inc has the following capital structure: Assets $ 350,000 Debt $ 140,000 Preferred stock 52,500 Common stock 157,500 The common stock is currently selling for $16 a...

Collinearity among the predictors is common in many applications, particularly those that track the growth of a new business over time. The problem is worse when the business has steadily grown or...

Do you agree or disagree with the paramilitary style of organization of most law enforcement agencies? Defend your position.

The exchange rate risk to feed the insurance company is the risk of unfavorable foreign exchange movements, specifically a drop in the market value of the British pound relative to the US dollar. It...

On 1 March 2007 DB Limited issued R560 000 15% debentures at R98. The debentures were to be redeemed at par in four equal annual payments starting 28 February 2010. Required: Journalise the above...