Question: Please post the formula along with the answer. (Preferably excel formula - whichever works easier) 6. (10 pts) On Wednesday, May 4, 2013, an 8%
Please post the formula along with the answer. (Preferably excel formula - whichever works easier)
6. (10 pts) On Wednesday, May 4, 2013, an 8% bond issued by XYZ has 20 years until maturity and closed at $950. If the bond has a face value of $1000 and pays interest semi-annually and XYZ has a marginal tax rate of 35%, what is XYZ's a after-tax cost of debt? 7. (10 pts) A company's common stock is expected to pay $2 in dividends annually over the next four years. At the end of the fourth year, its stock is expected to be valued at $45. (5 pts) If the firm's cost of equity is 12%, what is its intrinsic value today? (5 pts) What should its stock sell for in 1 year
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