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c) Calculate the price of the common stock. (2 marks) d) Calculate the cost of capital of the new bonds. (3 marks) Fleet Berhad's capital
c) Calculate the price of the common stock. (2 marks) d) Calculate the cost of capital of the new bonds. (3 marks)
Fleet Berhad's capital structure's details: Bonds: The company issued a 25 -year bond, 15 years ago, with a semiannual coupon of 8%. The current interest rate is 7.31%. Preferred stocks: The dividend rate is 8% on a par value of RM100, and the interest rate is 9.15%. Common stocks: The latest dividend paid was RM0.14 per share, growth rate is 5%, and the current interest rate is 9.14%. New Bonds: The company plans to issue new callable bonds with a floatation cost of 2%, an annual coupon of 8% for the term of 25 years. The bond's callable value is RM1,350 per unit, and will be sold today for RM875 per unit. Fleet Berhad's capital structure's details: Bonds: The company issued a 25 -year bond, 15 years ago, with a semiannual coupon of 8%. The current interest rate is 7.31%. Preferred stocks: The dividend rate is 8% on a par value of RM100, and the interest rate is 9.15%. Common stocks: The latest dividend paid was RM0.14 per share, growth rate is 5%, and the current interest rate is 9.14%. New Bonds: The company plans to issue new callable bonds with a floatation cost of 2%, an annual coupon of 8% for the term of 25 years. The bond's callable value is RM1,350 per unit, and will be sold today for RM875 per unit
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