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Firm A, established 10 years ago issued 20,000 bonds at face value for a maturity of 30 years at 10 percent coupon rate. Today, same
Firm A, established 10 years ago issued 20,000 bonds at face value for a maturity of 30 years at 10 percent coupon rate. Today, same bonds has a market return of rd= 16 percent.
Again, same firm issued 6 million shares of common stock 10 years ago at a price of 40 TL when return on equity (re) was equal to 16 percent, as stated by the board, these shares will par a dividend of Div1= 6 TL and grow at a rate of g=%5 constantly. Today, same shares has a market return of re= 20 percent.
- Calculate the Weighted Average Cost of Firm A on the day of establishment. (5 points).
- Calculate the Firm Value of A today. (10 points).
- Calculate the Weighted Average Cost of Firm A today. (5 points) Please solve more detailed. Thanks
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