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Hello! I need question 3,4,5 and 6. Please use excel and show formulas! Please dont answer if you only answer the first part thank you
Hello! I need question 3,4,5 and 6. Please use excel and show formulas! Please dont answer if you only answer the first part thank you so much!
Task 2: Weighted Average Cost of Capital (WACC) You are given the following information for Lifetime, Inc. Assume the company's tax rate is 21%. Debt: 150,000 bonds outstanding with 7.5% coupon rate, $1,000 par value, 20 years to maturity, selling for $1030; the bonds make semiannual payments. Common stock: 1.700,000 shares outstanding, selling for $45 per share the beta is 0.95. Preferred stock: 120,000 shares of 6% preferred stock, currently selling for $85 per share. Market: 7% market risk premium and 2% risk-free rate. Questions: What is the company's after-tax cost of debt? (5 point) 4. What is the company's cost of common stock? (5 point) 5. What is the company's cost of preferred stock? (5 point) 6. What is the company's WACC? (5 point) 01/01/00 01/01/20 150,000 7.5% 1,000 2 20 1,030 Input Debt Settlement date Maturity date Bonds outstanding Annual coupon rate Face value ($) Coupons per year Years to maturity Bond price ($) Common stock Shares outstanding Beta Share price ($) Preferred stock Shares outstanding Coupon rate - Share price ($) Market Market risk premium Risk-free rate e Tax rate 1,700,000 0.95 45 120,000 6.0% 85 7.0% 2.0% 21.0% Calculation & Output Market value of debt 1,545,000,000 Market value of equity 76,500,000 Market value of preferred 10,200,000 Market value of firm 1,631,700,000 Market value capital structure Weight of Debt Weight of Common Stock Weight of Preferred Stock Question 3 Pretax cost of debt Aftertax cost of debt Question 4 Cost of common stock Question 5 Cost of preferred stock Question 6 WACC Step by Step Solution
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