Below is information regarding the capital structure of Micro Advantage Inc. On the basis of this information you are asked to respond to the following three questions: Required: 1. Micro Advantage issued a $5,000,000 par value, 20-year bond a year ago at 98 (ie, 98% of par value) with a stated rte of 9%. Today, the bond is seling at 110 (ie, 110% of par value). If the firm's tax bracket is 30%, what is the current after-tax cost of this debt? 2. Micro Advantage has $5,000,000 preferred stock outstanding that it sold for $24 per share. The preferred stock has a per share par value of $25 and pays a $3 dividend per year. The current market price is $30 per share. The firm's tax bracket is 30%, what is the after-tax cost of the preferred stock? 3. In addition to the bonds and preferred stock described in requirements 1 and 2, Micro Advantage has 50,000 shares of common stock outstanding that has a par value of $10 per share and a current market price of $170 per share. The expected after-tax market return on the firm's common equity is 20%What is Micro Advantage's weighted-average cost of capital (WACC)? value of $25 and pays a $3 dividend per year. The current market price is $30 per share. The firm's tax bracket is 30%. after-tax cost of the preferred stock? 3. In addition to the bonds and preferred stock described in requirements 1 and 2, Micro Advantage has 50,000 shares of stock outstanding that has a par value of $10 per share and a current market price of $170 per share. The expected after-ta return on the firm's common equity is 20%,What is Micro Advantage's weighted-average cost of capital (WACC)? Complete this question by entering your answers in the tabs below. equired 1 Required 2 Required 3 Micro Advantage issued a $5,000,000 par value, 20-year bond a year ago at 98 (i.e., 98% of par value) with a stated rate of 9%. Today, the bond is selling at 110 (i.e., 110% of par value). If the firm's tax bracket is 30%, what is the current after-tax cost of this debt? (Round your answer to 2 decimal places. (i.e. .1234-12.34%)) nt after-tax cost of this debt Required 1 Required 2> after-tax cost of the preferred stock? 3. In addition to the bonds and preferred stock described in requirements 1 and 2, Micro Advantage has 50,000 shares of c stock outstanding that has a par value of $10 per share and return on the firm's common equity is 20%What is Micro Advantage's weighted-average cost of capital (WACC)? Complete this question by entering your answers in the tabs below. Required 1Required 2 Required3 Micro Advantage has $5,000,000 preferred stock outstanding that it sold for $24 per share. The preferred stock has a per share par value of $25 and pays a $3 dividend per year. The current market price is $30 per share. The firm's tax bracket is 30%, what is the after-tax cost of the preferred stock? Required 1 Required 3> 3. In addition to the bonds and preferred stock described in requirements 1 and 2, Micro Advantage has 50,000 shares of common stock outstanding that has a par value of $10 per share and a current market price of $170 per share. The expected after-tax market return on the firm's common equity is 20%What is Micro Advantage's weighted-average cost of capital MACC)? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 In addition to the bonds and preferred stock described in requirements I and 2, Micro Advantage has 50,000 shares of common stock outstanding a par value of $10 per share and a current market price of $170 per share. The expected after-tax market return on the firm's common equity is is Micro Advantage's weighted-average cost of capital (WACC)? (Round "After-tax Rate or Expected Return" and "Cost of Capital Components" to places (Le, .1234-12.34%), "Weights" to 3 decimal places, and other answers to the nearest whole dollar amount.) She After-tax Rate or C Market Weights Book Value Bond Preferred stock Common stock Total Required 2 Required 3
