Question: Please answer them all in a time crunch and I only have 2 questions left in my subscription. 1. The Brady Company has a beta
Please answer them all in a time crunch and I only have 2 questions left in my subscription.
1. The Brady Company has a beta of 1.2 and just paid a $5 dividend. Dividends are expected to grow at a constant 4% per year. The risk free rate is 4% and the expected return on the market is 10%. At what price would Brady stock be fairly priced?
2. Omaha Company's capital structure is 48% equity, 37% debt, 15% preferred stock. It has a pretax cost of debt of 9% and a marginal tax rate of 40%. Its cost of equity is 14%, its beta is 1.8%, and its cost of preferred stock is 8.5%. What is Omaha Company's weighted average cost of capital?
3. Elephant Company has 200,000 shares of common stock outstanding. It just paid a common dividend of $5 per share, and its common stock currently sells for $140 per share. Elephant Company has 25,000 shares of preferred stock outstanding. The preferred stock pays and annual dividend of $2.00 per share and currently sells for $30 per share. Elephant Company has 10,000 7% bonds outstanding. The bonds have a face value of $1,000 and mature in 10 years. The bonds currently sell for $865. Elephant Company has a Beta of .80, and its marginal tax rate is 40%. The risk free rate is 4%. The required return on the market is 12%. What is the Cost of Preferred Stock?
4. Elephant Company has 200,000 shares of common stock outstanding. It just paid a common dividend of $5 per share, and its common stock currently sells for $140 per share. Elephant Company has 25,000 shares of preferred stock outstanding. The preferred stock pays and annual dividend of $2.00 per share and currently sells for $30 per share. Elephant Company has 10,000 7% bonds outstanding. The bonds have a face value of $1,000 and mature in 10 years. The bonds currently sell for $865. Elephant Company has a Beta of .80, and its marginal tax rate is 40%. The risk free rate is 4%. The required return on the market is 12%. What is Elephant Company's Cost of Debt?
5. Elephant Company has 200,000 shares of common stock outstanding. It just paid a common dividend of $5 per share, and its common stock currently sells for $140 per share. Elephant Company has 25,000 shares of preferred stock outstanding. The preferred stock pays and annual dividend of $2.00 per share and currently sells for $30 per share. Elephant Company has 10,000 7% bonds outstanding. The bonds have a face value of $1,000 and mature in 10 years. The bonds currently sell for $865. Elephant Company has a Beta of .80, and its marginal tax rate is 40%. The risk free rate is 4%. The required return on the market is 12%. What is Elephant Company's Cost of Equity?
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