Cost of preferred stock.??Kyle is raising funds for his company by selling preferred stock. The preferred stock has a par value of

?$100

and a dividend rate of

6.0%.

The stock is selling for

?$80.00

in the market. What is the cost of preferred stock for? Kyle?

Cost of? equity: SML. Stan is expanding his business and will sell common stock for the needed funds. If the current? risk-free rate is

4.0%

and the expected market return is

12.0?%,

what is the cost of equity for Stan if the beta of the stock is

a.0.75?

b.??0.90?

c.??1.05?

d.??1.20?

Cost of debt with

fees.

??Kenny Enterprises will issue a bond with a par value of

?$1 ,000?

a maturity of twenty? years, and a coupon rate of

7.9%

with semiannual? payments, and will use an investment bank that charges

?$20

per bond for its services. What is the cost of debt for Kenny Enterprises at the following market? prices?

a.??$898.79

b.??$995.53

c.??$1,069.62

d.??$1,149.97

WACC.

??Eric has another? get-rich-quick idea, but needs funding to support it. He chooses an? all-debt funding scenario. He will borrow

?$4,941

from? Wendy, who will charge him

8?%

on the loan. He will also borrow

?$4,576

from? Bebe, who will charge him

10?%

on the? loan, and

?$2,483

from? Shelly, who will charge him

16%

on the loan. What is the weighted average cost of capital for? Eric?

Adjusted

WACC.

??Lewis runs an outdoor adventure company and wants to know what effect a tax change will have on his? company's WACC. ? Currently, Lewis has the following financing? pattern: ?Equity:??

41%

and cost of

16.43%

Preferred? stock:??

24?%

and cost of

12.44?%

?Debt:??

35%

and cost of

10.9%

before taxes

What is the adjusted WACC for Lewis if the tax rate is

a.??40?%?

b.??25?%?

c.??15?%?

d.??10?%?

e.??0%?

Beta of a

project.

??Magellan is adding a project to the company portfolio and has the following? information: the expected market return is

14.2%,

the? risk-free rate is

4.1%,

and the expected return on the new project is

12.7?%.

What is the? project's beta?

Adjusted WACC. Lewis runs an outdoor adventure company and wants to know what effect a tax change will have on his? company's WACC. ? Currently, Lewis has the following financing? pattern: ?Equity:??

35%

and cost of

14.00%

Preferred? stock:??

15%

and cost of

11.00?%

?Debt:??

50%

and cost of

10.0%

before taxes