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Abbys Motor finances its long-term investment with bond and common stock. The firm has a total of 2,500 units of bond selling at 115% of
Abbys Motor finances its long-term investment with bond and common stock. The firm has a total of 2,500 units of bond selling at 115% of its par value at a cost of 10%. Currently, the firm has 105,000 shares of common stock outstanding that sells at RM35 per share with an expected dividend of RM4.25 that grows forever at 5%. The firms tax rate is 28%. What is the weighted average of costs of capital of Abbys Motor?
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