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I need assistance with questions d and e only. Thank you. Cost of capital Edna Recording Studios, Inc.; reported earnings available to common stock of
I need assistance with questions d and e only. Thank you.
Cost of capital Edna Recording Studios, Inc.; reported earnings available to common stock of $4200,000 last year. From those earnings, the company paid a dividend of $1.25 on each of its 1,000,000 common shares outstanding. The capital structure of the company includes 30% debt, 25% preferred stock, and 45% common stock. It is taxed at a rate of 30%. If the market price of the common stock is $42 and dividends are expected to grow at a rate of 9% per year for the foreseeable future, what is the company's cost of retained earnings financing? If underpricing and flotation costs on new shares of common stock amount to $5 per share, what is the company's cost of new common stock financing? The company can issue $2.16 dividend preferred stock for a market price of $29 per share. Flotation costs would amount to $4 per share What is the cost of preferred stock financing? The company can issue $1,000-par-value, 6% coupon, 9-year bonds that can be sold for $1, 250 each. Flotation costs would amount to $2( per bond. Use the estimation formula to figure the approximate after-tax cost of debt financing? What is the WACC? If the company can issue $2.16 dividend preferred stock for a market price of $29 per share, and flotation costs would amount to $4 per share, the cost of preferred stock financing is 8.64 %. (Round to two decimal places.) If the company can issue $1,000-par-vahie, 6% coupon, 9-year bonds that can be sold for $1, 250 each, and flotation costs would amount to $20 per bond, using the estimation formula, the approximate after-tax cost of debt financing is %. (Round to two decimal places.)Step by Step Solution
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