Question: Question 3 - 4 points You have collected the following information for Santa clause Enterprises. Equity: The company has 1000 shares of common stock outstanding


Question 3 - 4 points You have collected the following information for Santa clause Enterprises. Equity: The company has 1000 shares of common stock outstanding at a current price of $40 a share. The stock has a beta of 1.21. The market risk premium is 8% and the risk-free rate is 3%. Debt: The firm also 20 bonds outstanding. Each bond has a face value of $1000, annual coupon on 6%, maturity of eight years. The current price of the bond is $1031. Preferred shares: The company has 400 shares of preferred stock at a current price of $50 per share. The preferred shares pay a dividend of $5 per share annually. Tax rate: The company has a tax rate of 35 percent. A. Using the capital asset pricing model, what is the company's cost of equity? Show details of your calculations in the space provided below: B. What is the company's post-tax cost of debt: Show details of your calculations in the space provided below: C. What is the cost of preferred shares? Show details of your calculations in the space provided below: D. What is the swoiabtod ovorogo mnet of ranital for the namnanu? Chowdotails of your solculations in the Display Settings Focus 11. Uwg o dpilar asset pricing model, what is the company's cost of equity? Show details of your calculations in the space provided below: B. What is the company's post-tax cost of debt: Show details of your calculations in the space provided below: C. What is the cost of preferred shares? Show details of your calculations in the space provided below: D. What is the weighted average cost of capital for the company? Show details of your calculations in the space provided below: Display Settings C Foca
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