Can you answer case question a,b,c,d,e,f,g,h,i,j,k,l,m,n,o,p

During the last few years, Harry Davis Industries has been too constrained by the high cost of capital to make many capital investments. Recently, though, capital costs have been declining, and the company has de- cided to look seriously at a major expansion program proposed by the marketing department. Assume that you are an assistant to Leigh Jones, the financial vice president. Your first task is to estimate Harry Davis' cost of capital. Jones has provided you with the lowing data, which she believes may be relevant to (2) Should the component costs be figured on a before-tax or an after-tax basis? (3) Should the costs be historical (embedded) costs or new (marginal) costs? b. What is the market interest rate on Harry Davis debt, and what is the component cost of this debt for WACC purposes? c. (1) What is the firm's cost of preferred stock? (2) Harry Davis preferred stock is riskier to inves tors than its debt, yet the preferred stock's yield to investors is lower than the yield to maturity on the debt. Does this suggest that you have (1) The firm's tax rate is 400b (2) The current price of Harry Davis, 12% coupon, made a mistake? (Hint: Think about taxes.) semiannual payment, noncallable bonds with 15 d. () What are the two primary ways companies ears remaining to maturity is $1,153.72. Harry Davis does not use short-term interest-bearing (2) Why is there a cost associated with reinvested debt on a permanent basis. New bonds would be privately placed with no flotation cost. raisc common equity (3) Harry Davis doesn't plan to issue new shares of common stock. Using the CAPM approach, what is Harry Davis' estimated cost of equity? e. (1) What is the estimated cost of equity using (3) The current price of the firm's 10%, s 100 par val ue, quarterly dividend, perpetual preferred stock is $116.95. Harry Davis would incur flotation costs equal to 5% of the proceeds on a new issue the discounted cash flow (DCF) approach? (4) Harry Davis common stock is currently sell ing at $50 per share. Its last dividend D) was $3.12, and dividends are expected to grow at a constant rate of 5.8% in the foreseeable future. Harry Davis beta is 1.2, the yield on T-bonds is 5.6%, and the market risk premium is estimated to be 6%. For the own-bond-yield-plus-judgmental risk-premium approach, the firm uses a 3.2% risk (2) Suppose the firm has historically earned 15% on equity (ROE) and has paid out 62 of carnings, and suppose investors expect simi- lar values to obtain in the future. How could ou use this information to estimate the fu- ture dividend growth rate, and what growth rate would you get? Is this consistent with the 5.8% growth rate given earlier? (3) Could the DCF method be applied if the growth what is the cost ofequity based on the own-bond- g. What is your final estimate for the cost of eq- (5) Hary Davis' target capital structure is 30% long-term debt, 10% preferred stock. and 609b common equity, rate were not constant? How? f. yield-plus-judgmental-risk-premium method? To help you structure the task, Leigh Jones has asked you to answer the following questions. () What sources of capital should be included when you estimate Harry Davis' weighted av h. What is Harry Davis' weighted average cost of erage cost of capital