$ In millions Les and Equy Capital 12 Accounts Payale Accra 18 20 Short Term debit o 55 Current Liabilities 30 Long term debt 35 45 Preferred stock (40,000 shares) 5 Common stock (2,900,000 shares) 10 Retained earnings Total equity 20 Total Assets 100 Total Liabilities and Equity 30 following facts apply to Rapunzel: em debt consists of 22,400 bonds, each having a 15 year maturity, semi annual payments, a coupon rate of 7.8% and of 51000. Currently these bond provide with a yield to maturity of 8.5%. If new bonds were sold, they would have eld to maturity as well 100 de Inc has perpetual preferred stock with a $70 par value with a 8% dividend. Similar stocks sell in the market Pel Castle Inc must pay flotation costs of 5% to sell new perpetual preferred stock. 2.9 million shares of common stock outstanding, a price per share mon equity (ROE) is expected to be 9%. be issued. Your cost of capital shoul projects that are in the same risk class as the assets Rapunzel now operates. Base questions. a. What are the current market value weights for debt, preferred and commons b. What is the after tax cost of debt? (2 points) c. What is the cost of preferred stock? (3 points) d. What is the required rate of return on common stock using CAPM? (2 poir e. Use the retention growth equation to estimate the expected growth rate dividend growth model to estimate the required return on common stock. Use the required return on stock from the CAPM model and calculate th how me your work. TYPE IN YOUR ANSWER DETAILS (in case things d se either your calculator or use the link below, Quiz 4-Sx workbook, pre EPSO O $6. The return on equity (ROD) Ispected to be The stock has a beta of 1.62. The T-bond rate is 3% and RPM is estimated to be 6%. Rapunzel Castle Inc Is In the 35% tax bracket Assume that you were hired by Rapunzel Castle Inc as a financial analyst and you under the assumption that no new equity will be issued. Your cost of capital she projects that are in the same risk class as the assets Rapunzel now operates. B Questions. What are the current market value weights for debt, preferred and comm hat is the after tax cost of debt? (2 points) -t is the cost of preferred stock? (3 points) is the required rate of return on common stock using CAPM? Toalety 100 100 Tabies and Equity 1240 echiya 15 year maturity, semiannual payments, a coupon rate of 7.8% and a bomo Cree bond provide with a yield to maturity of 8.5%. If new bonds were sold, they would have de esta preferred stock with a $70 par value with a 8% dividend. Similar stocks sell in the market mata festation costs of 5% to sell new perpetual preferred stock. 21aese common stock outstanding, a price per share of $23, dividend paid, DO of $1.20 and equity (ROE) is expected to be 9% The 12. The T-bond rate is 3% and RPm is estimated to be 6%. On the 35tax bracket weer eed by Rapunzel Castle loc as a financial analyst and you are asked to estimate the company's WACC ention that no new equity will be issued. Your cost of capital should be appropriate for use in evaluating Kven the same risk class as the assets Rapunzel now operates. Based on your analysis, answer the following et market value weights for debt, preferred and common stock? (6 points) of debt? (2 points) DOLL The following table glves the current balance sheet for Rapunzel Casting bed and breakdunt company. Assets $ in millions Cash Liabilities and Equity Capital 15 Simons Accounts Payale Accounts Recelvable 20 12 Inventories Accruals 20 18 Short Term debt Current assets 55 0 Current Liabilities 30 Long term debt Net Fixed Assets 35 45 Preferred stock (40,000 shares) 5 Common stock (2,900,000 shares) 10 Retained earnings 20 Total equity 30 Total Assets 100 Total Liabilities and Equity 100 The following facts apply to Rapunzel: eng term debt consists of 22,400 bonds, each having a 15 year maturity, semi annual payments, a coup ce value of $1000. Currently these bond provide with a yield to maturity of 8.5%. If new bonds were: 3.5% yield to maturity as well. Long term debt consists of 22.400 bonds east 15 yaw.. face value of $1000. Currently theme bond provide with Yield to new other an 8.5% yleld to maturity as well Rapunzel Castle Inc has perpetual preferred stock with a $70 par with a de for $75. Rapunzel Castle Inc must pay flotation costs of 5% to new perpetua preferred The company has 2.9 million shares of common stock outstandine, a price per share of $23. dividend 11.20 EPSO of $6. The return on equity (ROE) is expected to be 9%. The stock has a beta of 1.62. The T-bond rate is 3% and RPm is estimated to be 6% Rapunzel Castle Inc is in the 35% tax bracket. Assume that you were hired by Rapunzel Castle Inc as a financial analyst and you are asked to estimate the compasWACC under the assumption that no new equity will be issued. Your cost of capital should be appropriate for use in eving projects that are in the same risk class as the assets Rapunzel now operates. Based on your analysis, answer the following questions. a. What are the current market value weights for debt, preferred and common stock? (6 points) b. What is the after tax cost of debt? (2 points) c. What is the cost of preferred stock? (3 points) d. What is the required rate of return on common stock using CAPM? points) e. Use the retention growth equation to estimate the expected growth rate. Then use the expected growth rate and the dividend growth model to estimate the required return on common stock. (3 points) Use the required return on stock from the CAPM model and calculate the WACC. (4 points) bow me your work. TYPE IN YOUR ANSWER DETAILS (in case things do not save properly) for partial credit. e either your calculator or use the link below, Quiz 4-Sx workbook, provided to access excel for calculations and save The following table glves the current balance sheet for Rapunzel Castle inc. bed and breast company Assets $ in millions Cash Liabilities and Equity Capital 15 Sinions Accounts Payale Accounts Recelvable 20 Accruals 12 Inventories 20 18 Short Term debt Current assets 55 O Current Liabilities 30 Long term debt Net Fixed Assets 35 45 Preferred stock (40,000 shares) 5 Common stock (2,900,000 shares) 10 Retained earnings 20 Total equity 30 Total Assets 100 Total Liabilities and Equity 100 The following facts apply to Rapunzel: eng term debt consists of 22,400 bonds, each having a 15 year maturity, semi annual payments, a coup ce value of $1000. Currently these bond provide with a yield to maturity of 8.5%. If new bonds were: 3.5% yield to maturity as well. Long term debt consists of 22.400 bonds each 15 www. face value of $1000. Currently these bond provide with Yield to the an 8.5% yield to maturity as well Rapunzel Castle Inc has perpetual preferred stock with a $70 par valse with a wide for $75. Rapunzel Castle Inc must pay flotation costs of 5% to sew perpetua preferred The company has 2.9 million shares of common stock outstandine, a price per share of 123. dividend 11.20 EPSO of $6. The return on equity (ROE) is expected to be 9%. The stock has a beta of 1.62. The T-bond rate is 3% and RPm is estimated to be 6%. Rapunzel Castle Inc is in the 35% tax bracket Assume that you were hired by Rapunzel Castle Inc as a financial analyst and you are asked to estimate the wWMCC under the assumption that no new equity will be issued. Your cost of capital should be appropriate for use in eng projects that are in the same risk class as the assets Rapunzel now operates. Based on your analysis, amwer the following questions. a. What are the current market value weights for debt, preferred and common stock? (6 points) b. What is the after tax cost of debt? (2 points) c. What is the cost of preferred stock? (3 points) d. What is the required rate of return on common stock using CAPM? (2 points) e. Use the retention growth equation to estimate the expected growth rate. Then use the expected growth rate and the dividend growth model to estimate the required return on common stock. (3 points) Use the required return on stock from the CAPM model and calculate the WACC. (4 points) bow me your work. TYPE IN YOUR ANSWER DETAILS (in case things do not save properly) for partial credit. e either your calculator or use the link below, Quiz 4-Sx workbook, provided to access excel for calculations and save $ In millions Les and Equy Capital 12 Accounts Payale Accra 18 20 Short Term debit o 55 Current Liabilities 30 Long term debt 35 45 Preferred stock (40,000 shares) 5 Common stock (2,900,000 shares) 10 Retained earnings Total equity 20 Total Assets 100 Total Liabilities and Equity 30 following facts apply to Rapunzel: em debt consists of 22,400 bonds, each having a 15 year maturity, semi annual payments, a coupon rate of 7.8% and of 51000. Currently these bond provide with a yield to maturity of 8.5%. If new bonds were sold, they would have eld to maturity as well 100 de Inc has perpetual preferred stock with a $70 par value with a 8% dividend. Similar stocks sell in the market Pel Castle Inc must pay flotation costs of 5% to sell new perpetual preferred stock. 2.9 million shares of common stock outstanding, a price per share mon equity (ROE) is expected to be 9%. be issued. Your cost of capital shoul projects that are in the same risk class as the assets Rapunzel now operates. Base questions. a. What are the current market value weights for debt, preferred and commons b. What is the after tax cost of debt? (2 points) c. What is the cost of preferred stock? (3 points) d. What is the required rate of return on common stock using CAPM? (2 poir e. Use the retention growth equation to estimate the expected growth rate dividend growth model to estimate the required return on common stock. Use the required return on stock from the CAPM model and calculate th how me your work. TYPE IN YOUR ANSWER DETAILS (in case things d se either your calculator or use the link below, Quiz 4-Sx workbook, pre EPSO O $6. The return on equity (ROD) Ispected to be The stock has a beta of 1.62. The T-bond rate is 3% and RPM is estimated to be 6%. Rapunzel Castle Inc Is In the 35% tax bracket Assume that you were hired by Rapunzel Castle Inc as a financial analyst and you under the assumption that no new equity will be issued. Your cost of capital she projects that are in the same risk class as the assets Rapunzel now operates. B Questions. What are the current market value weights for debt, preferred and comm hat is the after tax cost of debt? (2 points) -t is the cost of preferred stock? (3 points) is the required rate of return on common stock using CAPM? Toalety 100 100 Tabies and Equity 1240 echiya 15 year maturity, semiannual payments, a coupon rate of 7.8% and a bomo Cree bond provide with a yield to maturity of 8.5%. If new bonds were sold, they would have de esta preferred stock with a $70 par value with a 8% dividend. Similar stocks sell in the market mata festation costs of 5% to sell new perpetual preferred stock. 21aese common stock outstanding, a price per share of $23, dividend paid, DO of $1.20 and equity (ROE) is expected to be 9% The 12. The T-bond rate is 3% and RPm is estimated to be 6%. On the 35tax bracket weer eed by Rapunzel Castle loc as a financial analyst and you are asked to estimate the company's WACC ention that no new equity will be issued. Your cost of capital should be appropriate for use in evaluating Kven the same risk class as the assets Rapunzel now operates. Based on your analysis, answer the following et market value weights for debt, preferred and common stock? (6 points) of debt? (2 points) DOLL The following table glves the current balance sheet for Rapunzel Casting bed and breakdunt company. Assets $ in millions Cash Liabilities and Equity Capital 15 Simons Accounts Payale Accounts Recelvable 20 12 Inventories Accruals 20 18 Short Term debt Current assets 55 0 Current Liabilities 30 Long term debt Net Fixed Assets 35 45 Preferred stock (40,000 shares) 5 Common stock (2,900,000 shares) 10 Retained earnings 20 Total equity 30 Total Assets 100 Total Liabilities and Equity 100 The following facts apply to Rapunzel: eng term debt consists of 22,400 bonds, each having a 15 year maturity, semi annual payments, a coup ce value of $1000. Currently these bond provide with a yield to maturity of 8.5%. If new bonds were: 3.5% yield to maturity as well. Long term debt consists of 22.400 bonds east 15 yaw.. face value of $1000. Currently theme bond provide with Yield to new other an 8.5% yleld to maturity as well Rapunzel Castle Inc has perpetual preferred stock with a $70 par with a de for $75. Rapunzel Castle Inc must pay flotation costs of 5% to new perpetua preferred The company has 2.9 million shares of common stock outstandine, a price per share of $23. dividend 11.20 EPSO of $6. The return on equity (ROE) is expected to be 9%. The stock has a beta of 1.62. The T-bond rate is 3% and RPm is estimated to be 6% Rapunzel Castle Inc is in the 35% tax bracket. Assume that you were hired by Rapunzel Castle Inc as a financial analyst and you are asked to estimate the compasWACC under the assumption that no new equity will be issued. Your cost of capital should be appropriate for use in eving projects that are in the same risk class as the assets Rapunzel now operates. Based on your analysis, answer the following questions. a. What are the current market value weights for debt, preferred and common stock? (6 points) b. What is the after tax cost of debt? (2 points) c. What is the cost of preferred stock? (3 points) d. What is the required rate of return on common stock using CAPM? points) e. Use the retention growth equation to estimate the expected growth rate. Then use the expected growth rate and the dividend growth model to estimate the required return on common stock. (3 points) Use the required return on stock from the CAPM model and calculate the WACC. (4 points) bow me your work. TYPE IN YOUR ANSWER DETAILS (in case things do not save properly) for partial credit. e either your calculator or use the link below, Quiz 4-Sx workbook, provided to access excel for calculations and save The following table glves the current balance sheet for Rapunzel Castle inc. bed and breast company Assets $ in millions Cash Liabilities and Equity Capital 15 Sinions Accounts Payale Accounts Recelvable 20 Accruals 12 Inventories 20 18 Short Term debt Current assets 55 O Current Liabilities 30 Long term debt Net Fixed Assets 35 45 Preferred stock (40,000 shares) 5 Common stock (2,900,000 shares) 10 Retained earnings 20 Total equity 30 Total Assets 100 Total Liabilities and Equity 100 The following facts apply to Rapunzel: eng term debt consists of 22,400 bonds, each having a 15 year maturity, semi annual payments, a coup ce value of $1000. Currently these bond provide with a yield to maturity of 8.5%. If new bonds were: 3.5% yield to maturity as well. Long term debt consists of 22.400 bonds each 15 www. face value of $1000. Currently these bond provide with Yield to the an 8.5% yield to maturity as well Rapunzel Castle Inc has perpetual preferred stock with a $70 par valse with a wide for $75. Rapunzel Castle Inc must pay flotation costs of 5% to sew perpetua preferred The company has 2.9 million shares of common stock outstandine, a price per share of 123. dividend 11.20 EPSO of $6. The return on equity (ROE) is expected to be 9%. The stock has a beta of 1.62. The T-bond rate is 3% and RPm is estimated to be 6%. Rapunzel Castle Inc is in the 35% tax bracket Assume that you were hired by Rapunzel Castle Inc as a financial analyst and you are asked to estimate the wWMCC under the assumption that no new equity will be issued. Your cost of capital should be appropriate for use in eng projects that are in the same risk class as the assets Rapunzel now operates. Based on your analysis, amwer the following questions. a. What are the current market value weights for debt, preferred and common stock? (6 points) b. What is the after tax cost of debt? (2 points) c. What is the cost of preferred stock? (3 points) d. What is the required rate of return on common stock using CAPM? (2 points) e. Use the retention growth equation to estimate the expected growth rate. Then use the expected growth rate and the dividend growth model to estimate the required return on common stock. (3 points) Use the required return on stock from the CAPM model and calculate the WACC. (4 points) bow me your work. TYPE IN YOUR ANSWER DETAILS (in case things do not save properly) for partial credit. e either your calculator or use the link below, Quiz 4-Sx workbook, provided to access excel for calculations and save