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11 (25 pts overall) Consider the following information about Federated Junkyards of America (FJA): Debt: $75,000,000 book value outstanding, trading at 90% of book value.

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11 (25 pts overall) Consider the following information about Federated Junkyards of America (FJA): Debt: $75,000,000 book value outstanding, trading at 90% of book value. The debt has a remaining maturity of 10 years, and pays a semiannual coupon. The coupon rate is 7.5%. . Common equity: 2,500,000 shares selling at S42 per share. The company just paid a dividend of S3.75, and the growth in dividends is expected to be a constant 8% indefinitely. Preferred equity: 200,000 shares selling at $85 per share. The dividend rate is 10%. Taxes: FJA's marginal tax rate is 35%. .. Compute the weighted average cost of capital for FJA. (2 pts) Total value of the company Use 2 values after the decimals for all item below: Capital structure (2 pts each): % debt _% common % preferred (2 pts each) Before tax cost of components: % for debt, % for common, for preferred (2 pts each) After tax cost of components: % for debt, % for common, for preferred (5 pts) Weighted average cost of capital

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