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Example 1: Assume that ABC company has $2000 per value zero-coupon bonds outstanding, the bonds are currently trading at $700 with 5 years to maturity.

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Example 1: Assume that ABC company has $2000 per value zero-coupon bonds outstanding, the bonds are currently trading at $700 with 5 years to maturity. Tax bracket was = 35%. Example 2: Assume that BMW company has preferred stock outstanding with per value of $2000, dividend per share of $20.5, and a current market value of $100. Example 3: Assume that the OPJ company has common stock outstanding with current market value of $150 per share, and the current dividend of $10 per share, and dividend growth of 10% forever. Example 4: Assume that GSW company has a company beta of 2.5. Research by the financial manager suggests that the risk-free rate is 7% and the expected return on the market is 20%

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