Calculate Cost of debt, cost of preferred stock, and cost of common equity

Firm calculating cost of capital for major expansion program.
Tax rate = 21%.
10-year, 8% coupon, semiannual payment noncallable bonds sell for $1,153.72.  New bonds will be privately placed with no flotation cost.
7%, $100 par value, annual dividend, perpetual preferred stock sells for $120.
Common stock sells for $70.  D0 = $4.39 and g =4.09%.
b = 1.1; rRF = 6%; Market Risk Premium = 6%.
Bond-Yield Risk Premium = 4%.
 

 

2. Calculate how much is the Economic Value Added (EVA) for the firm.

You are provided with the following information for a firm:

E B I T = $250,000
Amount of Financial Capital = $2,500,000
Cost of capital 13%
Assume tax rate is 21%
 

 

3.

You bought a stock for $105. You received $7 annual dividend on the stock. After holding the investment for 2 years the stock currently sells for $74. Calculate your total return from this investment.

 

4. Ordinary Annuity

What's the FV of a 5-year $120 annuity, if the quoted interest rate is 2.75%, compounded quarterly? What is PV of the same annuity?

 

5.

Calculate the payment amount for a $1,000, 2% semi-annual rate loan with 5 total number of payments.

 

6.

A 9-year, 7.5% annual coupon bond selling for $1,150 can be called in 3 years for $1,070, what is its yield to call (YTC) on this bond?

 

7.

A bond has a coupon of 7.5% and it pays interest semiannually. With a face value of $1000, it will mature after 7 years. If you require a return of 7% from this bond, how much should you pay for it?

8.

Last dividend of a company was $3 and it is expected that the dividend will continue to grow at 7% at a constant rate. What should be the price of the company's stock one year from now if opportunity cost of capital is 7.01%?