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ABC Corporation has $10M face value Coupon rate= 3.5% Annual Coupon Time to maturity = 10 years YTM = 5% Tax rate = 35% Preferred
ABC Corporation has
$10M face value
Coupon rate= 3.5%
Annual Coupon
Time to maturity = 10 years
YTM = 5%
Tax rate = 35%
Preferred Shares
1 million shares outstanding
Par value = $5 per share
8% dividend rate (annual)
Equivalent shares yield 6%
Common Shares
Shares outstanding = 5M
Market Price= $25 per share
Beta = 0.8
T-Bill rate 3%
Expected return on the market E(km)= 9%
What is Ke. Kd, Kp we and WACC? Please show all steps.
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