1. The book value of Luxurys outstanding debt is $60 million. Currently, the debt is trading at 120% of face value and the yield-to-maturity is 12%. The 5 million outstanding shares of Luxury stock are selling for $20 per share. The required return on Luxury stock is 18%, and the tax rate is 25%. Calculate the weighted average cost of capital for the Luxury Porcelain Company.

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2. Suppose you buy a $1000 face- value coupon bond with a coupon rate of 10%, a maturity of 4 years,

1) Suppose you purchase the bond at a price of $1000, what is the yield to maturity?

2) suppose the purchase price is $800, what is the yield to maturity?

3) Suppose the purchase price is $1200, what is the yield to maturity?

How i can find the soultions using Excel ?

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3. Assume Walmart's preferred stock pays a dividend of $2 per share and sells for $100 per share. What is Walmart's cost of preferred stock?

4. Target has a 10-year corporate bond rated BBB+ by S&P. Assume the marginal tax rate is 35%. What is the pre and After-tax cost of the bond based on the following table?

( please check the attached Pic)

5. Hewlett-Packard Company (HPQ) has an interest coverage ratio of 3.1. Assume the marginal tax rate is 35%. The risk-free rate of 5% and HPQ market cap is $ 4.4 billion. What is the pre and after-tax cost of debt?

Reuters Corporate Spreads for Industrials 03/28/2014 1 yr 2 yr 3 yr 5 yr 7 yr 10 yr 30 yr Rating Aaa/AAA 12 18 28 42 65 Aa1 /AA+. 10 18 25 34 42 54 77 Aa2/AA 14 29 38 50 57 65 89 Aa3/AA 19 34 43 54 61 69 92 A1/A+ 23 39 47 58 65 72 95 A2/A 103 24 39 49 61 69 77 A3/A 32 49 59 72 80 89 Baal/BBB+ 38 61 75 92 103 115 151 Baa2 /BBB 75 89 107 119 170 132 83 108 122 140 152 165 204 Baa3/ BBB Ba1 /BB+ 157 182 198 217 232 248 286 Ba2/BB 231 256 27 295 312 330 367 Ba3/BB 305 330 350 372 392 413 449 B1/B+ 378 404 426 4500 472 495 530 B2/B 452 478 502 527 552 578 612 B3/B- 526 552 578 604 632 660 693 Caa/CCC+ 743 600 626 653 682 12 775 US Treasury Yield 0.13 0.45 0.93 1.74 2.31 2.73 3.55 Spread values represent basis points (bps) over a US Treasury security of the same maturity, or the closest matching maturity