What are the excel formulas for each of the problems? Emrem Co. issued a dividend this morning
Question:
What are the excel formulas for each of the problems?
Emrem Co. issued a dividend this morning for $1.75 per share. Analysts expect dividends to grow at 3.5% per year going forward. The price of Emrem Co. stock is currently $12.00. What is the implied equity cost of capital based on this information?
Dividend just issued
Expected growth rate
Current stock price
Implied cost of equity
Emrem Co. has issued a new bond. This bond has been issued at a $1,000 face value and annual coupon rate of 6.5% and is trading at a price that is 97% of face value. The bond has a maturity of 6 years and pays a coupon payment quarterly. For this bond calculate the number of periods to maturity, the bond price, coupon payment, YTM, and cost of debt.
T Term to maturity (years)
Face value
Annual coupon rate
Bond price (% of face value)
Coupon frequency (times per year)
Number of periods to maturity
Bond price
Coupon
YTM
Cost of debt
Cost of debt using EFFECT
Emrem Co. common stock has a beta value of 0.8, the risk free rate is 2.45% while the market portfolio risk premium has been calculated at 6.25%. Calcualte the cost of equity.
Beta
Risk free rate
Market portfolio risk premium
Cost of equity
The capital structure of Emrem Co. is comprised of 15% preferred stock, 30% debt, and 55% common stock. The required return for the preferred stock is 15%. The company has a tax rate of 22%. Use this information to calculate the WACC for Emrem Co.
Tax rate
Cost of debt
After tax cost of debt
Debt
Preferred stock
Common equity
WACC