Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Filer Mining Corporation has 8 million shares of common stock outstanding, 4 0 0 , 0 0 0 shares of 4 % preferred shares outstanding

Filer Mining Corporation has 8 million shares of common stock outstanding, 400,000 shares of 4% preferred shares outstanding ($100 par value each) and 150,000,7% semiannual bonds outstanding, par value $1000 each. The common stock currently sells for $43 per share. The preferred stock currently sells for $67 per share. The bonds have 15 years to maturity and sell for 93% of par. The market risk premium is 9% and t-bills are yielding 5%.The common stock has a beta of 1.3. The stock just paid a dividend of $2.00 per share and dividends are expected to grow at a rate of 10% forever. Filer Minings tax rate is 34%
a) What are the costs of each component (Rs)?
b) What is the firms market value capital structure?
c) What is the firms WACC?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Globalization Gating And Risk Finance

Authors: Unurjargal Nyambuu, Charles S. Tapiero

1st Edition

1119252652, 978-1119252658

More Books

Students also viewed these Finance questions

Question

How is iteration used across phases?

Answered: 1 week ago

Question

Final Words? P987

Answered: 1 week ago