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Holton Corporation has 10 million common shares outstanding, priced at $25 each. The cost of equity is 13.3%. The firm also has 1 million 7%
Holton Corporation has 10 million common shares outstanding, priced at $25 each. The cost of equity is 13.3%. The firm also has 1 million 7% perpetual preferred shares outstanding priced at $87 each. The preferred shares have a par value of $100 each. Finally, the firm has $100,000 , 8.5% annual coupon bonds outstanding, priced at $994 each, with 14 years left until maturity. The bonds have a par value of $1000 each. The corporate tax rate is 28%. What is the market value of the firm?
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