Question
Given the information below, what is a good estimate of this company's cost of common equity capital? current stock price = $105.25 yield to maturity
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Given the information below, what is a good estimate of this company's cost of common equity capital?
current stock price = $105.25
yield to maturity on the company's bonds = 7.2%
stock beta = 1.7
long-term return on the S&P 500 = 12%
risk-free rate = 1.5%
total shareholders' equity = $21.7 million
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Given the information below, what is a good estimate of this company's cost of preferred equity capital?
current preferred stock price = $71.28
long-term return on the S&P 500 = 11.7%
risk-free rate = 1.6%
total shareholders' equity = $18.1 million
most recent stock dividend = $2.75
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Given the information below, what is a good estimate of this company's cost of debt?
current stock price = $91.75
yield to maturity on the company's bonds = 7.1%
current bond price = $1,064.17
long-term return on the S&P 500 = 12%
stock beta = 0.97
risk-free rate = 1.7%
total shareholders' equity = $18.1 million
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Managerial Finance
Authors: John Fred Weston, Eugene F. Brigham, John Boyle, Robin John Limmack
1st Edition
0039101975, 978-0039101978
