Question: Please solve this and write the vinegar method and explanation A companys balance sheets show a total of $30 million long-term debt with a coupon
Please solve this and write the vinegar method and explanation
A companys balance sheets show a total of $30 million long-term debt
with a coupon rate of 9 percent that matures in 35 years and market price of 820 dollar The
and the debt has a total current market value of $25
million. The balance sheets also show that that the company has 10
million shares of stock. The current stock price is $10 per share.
risk free is 0.08 market return is 0.12 and beta is 1.125 , . The company has 2 million shares of preferred stock with market price30 dollars and dividends of 0.1 of 90 dollar par
taxes are 40%
What is the YTM
what is the cost of common stock?
what is the cost of preferred stock
what is the total value of the capital"?
what is the risk free
what is the weight of the bond
what is the weight of the stocks?
what is the weight of the preferred stock?
what is the weighted average cost of capital?(hint make sure to apply after tax concept)
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