Firm issued 2 million ordinary shares at $30.00, its currently trading at $43.50

The firm announced a dividend of $1.50, which will be paid in a month's time.

The company issued bonds with a face value of $30.00 million, time to maturity is 54

months, the required return on debt is 7.5%, and annual payments of 8% are required.

The company bought commonwealth treasury bonds that will expire in 90 days, it has

an interest rate of 2.6%.

There are 1,000,000 outstanding preference shares. They were issued at $12.00 per

share and has a face value of $10.00. It is currently trading on the market for $11.50

dollars.

A competitor firm with a beta of 1.5 has a required return on equity of 17.50%, our

firm beta is 1.25.

Compute values in the following table:

Common stock

Value

Weight

Discount rate

After-tax discount rate

Weight*after tax discount rate

Preference stock

Value

Weight

Discount rate

After-tax discount rate

Weight*after tax discount rate

Long-term debt

Value

Weight

Discount rate

After-tax discount rate

Weight*after tax discount rate