Question
Given the following information for USF Inc:Debt 25,000 7.6 percent coupon bonds outstanding, $1,000 par value, 30 years to maturity, selling for 99 percent of
Given the following information for USF Inc:Debt
25,000 7.6 percent coupon bonds outstanding, $1,000 par value, 30 years to maturity, selling for 99 percent of par; the bonds make semi-annual payments
Common Stock
395,000 shares outstanding, selling for $76 per share; with the next dividend expected to be 1.15 and after that a constant dividend growth rate of 5%.
Preferred Stock
30,000 shares of 4.5 percent preferred stock outstanding, $100 par value, currently selling for $64 per share
Market Information
6.5 percent market risk premium and 4.1 percent risk free rate
Company information
Tax rate: 35 percent
Calculate the following items
Market value of the debt
Market value of the equity
Market value of preferred stock
Market value of the firm
Cost of Equity
Cost of Debt (After-Tax)
Cost of Preferred Stock
WACC
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