Question
2,500,000 shares of common stock outstanding at $1 par Current market value of common stock is $24.43 per share Annual dividend per share is $1.95
2,500,000 shares of common stock outstanding at $1 par Current market value of common stock is $24.43 per share Annual dividend per share is $1.95 $1,750,000 bonds, 6.25% coupon, with a current market value of $104 (price of $104 for every $100 bond). $2,250,000 bonds, 5.75% coupon, with a current market value of $94.50 (price of $94.50 for every $100 bond). The corporate tax rate is 35% 950,000 share of preferred stock outstanding, par $10 with a stated preferred dividend rate of 5% and a current market value of common stock is $15.63 per share
Please calculate the current market yield, for an outside investor, for the:
1. Common stock
2. 6.25% bond
3. 5.75% bond
4. Preferred bond.
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