1) JJ firm issues a constant amount of preferred dividends at an annual value of $6. Its...

Question:

1) JJ firm issues a constant amount of preferred dividends at an annual value of $6. Its current preferred stock price is $30. What is the cost of preferred equity for JJ Firm? Express your answers in strictly numerical terms. For example, if the answer is 5%, write 0.05"
2) Assume that the equity beta for JJ is 1.02. The Yield on 10-year treasuries is 4%, and that the market risk premium for the year is 9%. What would be the for JJ? Express your answers in strictly numerical terms. For example, if the answer is 5%, write 0.05"
3) If the dividends for JJ firm are the same for common and preferred stock, and the price for is $17. What would be the for JJ firm? Express your answers in strictly numerical terms. For example, if the answer is 5%, write 0.05"
4) Using the results of Problems 2 and 3. If you are to be conservative in your approach, What is the that you will use in estimating the WACC? Express your answers in strictly numerical terms. For example, if the answer is 5%, write 0.05"
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Cost Of Equity
The cost of equity is the return a company requires to decide if an investment meets capital return requirements. Firms often use it as a capital budgeting threshold for the required rate of return. A firm's cost of equity represents the...