Question: Use the following information to answer the next 6 problems Calculate the annual (EAR) cost of equity using the dividend growth model. Note that dividends
Use the following information to answer the next 6 problems Calculate the annual (EAR) cost of equity using the dividend growth model. Note that dividends are paid quarterly. 12.55% What is the total market value of debt? $31,067,754 What is the after-tax cost of debt (leave as an APR)? 4,77% Calculate the after-tax cost of refinancing Bond 2 (leave this as an APR) given the marginal tax rate is 25%. 5.25% What are the capital structure weights of debt and equity? 0.6084 0.3916 What is the cost of capital? 7.82% The Absolute zero co. just issued a dividend of $3.20 per share on its common stock. The company is expected to maintain a constant 6.6 percent growth rate in its dividends indefinitely. If the stock sells for $64 a share, what is the company's cost of equity? 11.93% The Graber Corporation's common stock has a beta of 1.6. If the risk-free rate is 5.6 percent and the expected return on the market is 10 percent, what is the company's cost of equity capital? 12.64% Holdup Bank has an issue of preferred stock with a $4.55 stated annual dividend that just sold for $82 per share. What is the bank's cost of preferred stock? Assume the next dividend will be paid in one year. 5.55%
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