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AVE YOUR WORK Clearview Systems Ltd. B D Clearview Systems Ltd. Suppose you have been hired as a financial consultant to Clearview Systems Ltd., a large, publicly traded firm that is the market share leader in radon detection systems (RD5s). The company is looking at setting up a manufacturing plant overseas to produce a new line of RDS. The project will require an investment of $10.0 million dollars and the president of the company wants to be sure she understands her cost of capital before going ahead with the decision Market information for the latest year-end (December 31/2020) is as follows: Debt The company has issued 23,600 bonds, each with a par value of $1,000 and a coupon rate of 6.00 percent (payable semi-annually). The bonds were issued 9 years ago with a 25 year maturity. They are currently selling for $903,00 each. 157,000 preferred shares have been authorized (with 138,000 issued and outstanding), The closing price of preferred shares was $46.00 per share Preferred Stock Common Equity 322,000 common shares have been authorized (with 242,000 shares issued and outstanding). Common shares are selling for 543.00 per share. Question Waco DE MacBook Air NO # 3 $ 4 % S & 7 6 8 9 Q W E R T Y U S D F G J K Z C V M. D E B eferred Stock 157,000 preferred shares have been authorized (with 138,000 issued and outstanding The closing price of preferred shares was $46.00 per share. Common Equity 322,000 common shares have been authorized (with 242,000 shares issued and outstanding). Common shares are selling for $43.00 per share. Clearview Systems Ltd, uses G. M. Wharton as its lead underwriter. Wharton charges 5.00 percent commission on new common stock issues, 6.00 percent on new preferred stock issues, and 5.00 percent on new debt issues. Wharton has included all direct and indirect flotation costs in these rates. The preferred shares were issued six years ago and pay an annual dividend of $2.17 per share. Last year, Clearview Systems Ltd. declared and paid a common share dividend of $1.25 per share. This represented a 5.00 percent growth in the common share dividend (a rate that is expected to continue into the future) and a dividend payout ratio of 35.0 percent (also expected to continue into the future). Clearview Systems Ltd.'s tax rate is 30.0 percent. Preliminary year-end results show net earnings (after interest, taxes and preferred share dividends) for the year ending December 31, 2020 is $6.0 million. AVE YOUR WORK Clearview Systems Ltd. B D Clearview Systems Ltd. Suppose you have been hired as a financial consultant to Clearview Systems Ltd., a large, publicly traded firm that is the market share leader in radon detection systems (RD5s). The company is looking at setting up a manufacturing plant overseas to produce a new line of RDS. The project will require an investment of $10.0 million dollars and the president of the company wants to be sure she understands her cost of capital before going ahead with the decision Market information for the latest year-end (December 31/2020) is as follows: Debt The company has issued 23,600 bonds, each with a par value of $1,000 and a coupon rate of 6.00 percent (payable semi-annually). The bonds were issued 9 years ago with a 25 year maturity. They are currently selling for $903,00 each. 157,000 preferred shares have been authorized (with 138,000 issued and outstanding), The closing price of preferred shares was $46.00 per share Preferred Stock Common Equity 322,000 common shares have been authorized (with 242,000 shares issued and outstanding). Common shares are selling for 543.00 per share. Question Waco DE MacBook Air NO # 3 $ 4 % S & 7 6 8 9 Q W E R T Y U S D F G J K Z C V M. D E B eferred Stock 157,000 preferred shares have been authorized (with 138,000 issued and outstanding The closing price of preferred shares was $46.00 per share. Common Equity 322,000 common shares have been authorized (with 242,000 shares issued and outstanding). Common shares are selling for $43.00 per share. Clearview Systems Ltd, uses G. M. Wharton as its lead underwriter. Wharton charges 5.00 percent commission on new common stock issues, 6.00 percent on new preferred stock issues, and 5.00 percent on new debt issues. Wharton has included all direct and indirect flotation costs in these rates. The preferred shares were issued six years ago and pay an annual dividend of $2.17 per share. Last year, Clearview Systems Ltd. declared and paid a common share dividend of $1.25 per share. This represented a 5.00 percent growth in the common share dividend (a rate that is expected to continue into the future) and a dividend payout ratio of 35.0 percent (also expected to continue into the future). Clearview Systems Ltd.'s tax rate is 30.0 percent. Preliminary year-end results show net earnings (after interest, taxes and preferred share dividends) for the year ending December 31, 2020 is $6.0 million