Question
1. Using the Appendices in the text, what is the Market Value today of a bond with a PAR value of $5,000, with 9% annual
1. Using the Appendices in the text, what is the Market Value today of a bond with a PAR value of $5,000, with 9% annual coupon payments, with a YTM of 5% and 20 years to maturity?
2. What is the price of one share of preferred stock with a dividend of $8 and a rate of return of 6%?
3. Butter Corp. has a P/E of 16x. If EPS is $3.28, what is the price of one share of Butter Corp. common stock?
4. Given the following information, calculate the WACC.
Capital Structure: Debt = 40%
Pref. Stock = 20%
Common St = 40%
Additional Information:
Corporate Tax rate = 25%
Preferred Dividend = $8.50
Expected Common Dividend = $2.50
Preferred Price = $105.00
Growth Rate = 7%
Bond Yield = 9.5%
Preferred Floatation Cost = $3.60
Common Stock Price = $75.00
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