Question: Using the information provided below, answer the questions that follow. Growth rate of dividends & common stock share price = 4% Risk free rate of
Using the information provided below, answer the questions that follow. Growth rate of dividends & common stock share price = 4% Risk free rate of return = 5% Return on the market = 12% Tax bracket = 40% Dividend on common stock (past year) = $3 Dividend on preferred stock = $4 Price per share of common stock = $30 Price per share of preferred stock = $100 Beta = 1.3 Rate of Interest on Debt = 8% Assume that items in the balance sheet below are in the desired proportion. (The current capital structure is the target capital structure.) Assets $100,000,000 Long -term debt $45,000,000 Preferred stock $10,000,000 Common stock $30,000,000 Retained earnings $15,000,000 a.) What is this firm
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