You have been assigned to calculate the Weighted-Average-Cost-of-Capital for your firm, which has two sources of...
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You have been assigned to calculate the Weighted-Average-Cost-of-Capital for your firm, which has two sources of long-term capital. The company's marginal tax rate is 28%. First, there are 6,500,000 shares of common stock, which are currently selling for $153.12. Recently, the firm announced EPS of $12.64. You feel that it is reasonable to assume that earnings will grow at 1,65% into the future. Second, there are 6.000.000 shares of preferred stock outstanding that pay a perpetual (annual) dividend of $3.85, and are currently selling for $52.04. Third, there is an issue of 460,000 coupon bonds with a face value of $1,000, which pays 6.35% (annual) coupons, and mature in twenty-three years. These bonds are currently trading for $1,182.10. Given the assumptions, estimate the implied return on the common shares. (The answer is a percent, round your answer to two decimal places, e.g.4.75) Numeric Response 0.00740 You have been assigned to calculate the Weighted-Average-Cost-of-Capital for your firm, which has two sources of long-term capital. The company's marginal tax rate is 28%. First, there are 6,500,000 shares of common stock, which are currently selling for $153.12. Recently, the firm announced EPS of $12.64. You feel that it is reasonable to assume that earnings will grow at 1,65% into the future. Second, there are 6.000.000 shares of preferred stock outstanding that pay a perpetual (annual) dividend of $3.85, and are currently selling for $52.04. Third, there is an issue of 460,000 coupon bonds with a face value of $1,000, which pays 6.35% (annual) coupons, and mature in twenty-three years. These bonds are currently trading for $1,182.10. Given the assumptions, estimate the implied return on the common shares. (The answer is a percent, round your answer to two decimal places, e.g.4.75) Numeric Response 0.00740
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Related Book For
Introduction To Federal Income Taxation In Canada
ISBN: 9781554965021
33rd Edition
Authors: Robert E. Beam, Stanley N. Laiken, James J. Barnett
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