Question
LBD just paid a dividend of $1.60. g=5% and the current price of LBD stock is $40. There are 150,000 shares of common stock outstanding.
LBD just paid a dividend of $1.60. g=5% and the current price of LBD stock is $40. There are 150,000 shares of common stock outstanding. It has one bond issue outstanding with an 8% coupon and six years remaining to maturity that is quoted at a price of 106% of par. Their bond issue pays semi-annual coupons and its total face value is 800,000. LBD's owners also have a few shares of preferred stock. There are a total of 25,000 shares of preferred outstanding, and it is trading at $32 per share. The cost of preferred is 10%. Tax rate = 22%.
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What are the relevant TOTAL cash flows for each year that the production line is in use?
YR 0 |
Yr 1 |
Yr 2 |
Yr 3 |
Yr 4 |
Yr 5 |
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