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1. MKT VS. BOOK WEIGHT i. Bonds mature in 10 years; the coupon rate is 6%, and the required rate of retum is 8%. ii.

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1. MKT VS. BOOK WEIGHT i. Bonds mature in 10 years; the coupon rate is 6%, and the required rate of retum is 8%. ii. Preferred stock's expected return is 8% and the required rate of return is 12%. iii. Common Stock. The growth rate is 20% for the first three years, and then 7% onwards. The required rate of return is 17%. The dividend is $2,00 at the beginning of the investment horizon. A. Calculate the book value weight (Ignore short-term liabilities); B. Calculate the market price per bond. C. Calculate the market value of preferred stocks; D Calculate the market value weight of the firm's capital structure. (Ignore short-term liabilities) A. DETERMINE THIS COMPANY'S BOOK VALUE CAPITAL STRUCTURE B. DETERMINE THIS COMPANY'S MARKET VALUE CAPITAL STRUCTURE C. MARKET PRICE PER PREFERRED STOCK: D. MARKET-VALUE WEIGHT

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