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Consider the following company, Book Value of Debt $50 million YTM 10% Coupon 7% Coupon Payments semi-annually Years 20 Corporate Tax Rate 33% # of

Consider the following company,

Book Value of Debt $50 million
YTM 10%
Coupon 7%
Coupon Payments semi-annually
Years 20
Corporate Tax Rate 33%
# of Preferred Shares 2 million
Price of Preferred Share $25
Dividend per Preferred Shares $1.33
# of Common Shares 9.5 million
Price of Common Share $19
of Common Stock 1.3
Risk-Free Rate 4%
Market Return 10%

a. What is the market value of the debt? Enter your answer in terms of millions and rounded to 2 DECIMAL PLACES.

Enter your response below. Correct response: 37.130.03 million

b. What is the rate of return on the preferred stock? Enter you answer as a percentage and rounded to 2 DECIMAL PLACES. Do not include the percentage sign in your answers.

Enter your response below. Correct response: 5.320.01%

c. What is the market value of the preferred stock? Enter your answer in terms of millions.

Enter your response below. Correct response: 500.01 million

d. What is the rate of return of the equity? Enter your answer as a percentage. Do not include the percentage sign in your answers.

Enter your response below. Correct response: 11.80.01%

e. What is the market value of the equity? Enter your answer in terms of millions.

Enter your response below. million

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