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Calculate the cost of capital: Debt: XYZ issues 100 10-year bonds selling at $970 with a par of $1000. They have a coupon of 10%
Calculate the cost of capital: Debt: XYZ issues 100 10-year bonds selling at $970 with a par of $1000. They have a coupon of 10% paid semiannually. Preferred Stock: XYZ issues 1000 shares of preferred stock selling at $50 with an annual dividend of 5% based on $100 par. Common Stock: XYZ issues 10000 common shares at $7.XYZ just paid a dividend of $0.25. Investors require a 200% return. Other possible relevant information: Taxes are at 20%. Assume no flotation costs. Dividends have been paid over the past 5 years: 1 $0.01 2 $0.02 3 $0.04 4 $0.08 5 $0.16 Place all data, ratios, calculations, findings, etc. in the first Excel sheet with references to the information in other sheets
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