Suppose that you are trying to estimate your firm's cost of capital and you collect the...

Transcribed Image Text:

Suppose that you are trying to estimate your firm's cost of capital and you collect the following information: your firm's beta is 0.87; b. a firm similar to yours has just issued 10 year corporate A rated bonds with a 5% coupon for $98.5; a. your firm's 6% preferred stock is trading at $97; d. 10 year Treasuries are currently trading at yield to maturity of 4%; e. analysts are expecting the S&P 500 to yield 6% next year and this yield to grow at roughly 4% over the foreseeable future; the S&P 500 index is currently 1190.44. C. f. What is the firm's cost of equity, its cost of debt (before tax) and its cost of preferred stock? Suppose that you are trying to estimate your firm's cost of capital and you collect the following information: your firm's beta is 0.87; b. a firm similar to yours has just issued 10 year corporate A rated bonds with a 5% coupon for $98.5; a. your firm's 6% preferred stock is trading at $97; d. 10 year Treasuries are currently trading at yield to maturity of 4%; e. analysts are expecting the S&P 500 to yield 6% next year and this yield to grow at roughly 4% over the foreseeable future; the S&P 500 index is currently 1190.44. C. f. What is the firm's cost of equity, its cost of debt (before tax) and its cost of preferred stock?