Prudent Inc. is financed by 500000 issues of 8-year, 5% coupon bond, 1 million issues of...

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Prudent Inc. is financed by 500000 issues of 8-year, 5% coupon bond, 1 million issues of 8% preferred stock with $100 face value, and 20 million shares of common stocks. The bond has YTM of 6%, the preferred stock has required return of 10% and the common stock currently pays $1.5 in dividends and the dividend growths at 10% a year. The common stock has a required return of 12.8%. What is the weight of each of the asset class for the company's financial structure? Prudent Inc. is financed by 500000 issues of 8-year, 5% coupon bond, 1 million issues of 8% preferred stock with $100 face value, and 20 million shares of common stocks. The bond has YTM of 6%, the preferred stock has required return of 10% and the common stock currently pays $1.5 in dividends and the dividend growths at 10% a year. The common stock has a required return of 12.8%. What is the weight of each of the asset class for the company's financial structure?

Answer rating: 100% (QA)

To find the weight of each asset class in Prudent Incs financial structure we need to first c... View the full answer