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NaTI Debt 7,000, 7.5% coupon bonds outstanding, with 20 years to maturity, and quoted price of 108. These bonds pay interest semianually. The face value
NaTI Debt 7,000, 7.5% coupon bonds outstanding, with 20 years to maturity, and quoted price of 108. These bonds pay interest semianually. The face value of each bond is S1,000. Common Stock 180,000 shares of common stock selling for $60 per share. The stock has a beta of 0.90 and will pay a dividend of $2.80 next year. The dividend is expected to grow by 6% per year indefinitely 8,000 shares of 5.5% preferred stock selling at S94 per share. A 12% expected return, a 5% risk-free rate, and a 35% tax rate. Preferred Stock Market 1. What is the market value of Floridian Textiles Debt O ) 7,560,000 O b) $10,800,000 O c752,000 O d) 7,000,000 2. Usinthe Capital Asset Pricing Model (CAPM), what is Floridian Textiles, cost of Equity? Oa) 10.67% Ob.) 6.00% Oc) 7.50% Od) 11.30% Using the Dividend Discount Growth Model, what is Floridian Textiles 'cost of Equity? Oa) 10.67% Ob.) 6.00% Oc) 7.50% Od) 11.30% Floridian Textiles afer- tax cost of Debt is? C a) 6.76% Ob.) 4.40% Oc.) 2.63% Od) 35% Floridian textiss cost of Preferred Stock is? 0 a) 5.85% Ob.) 5.50% Oc) 12% O d) 5.00% 4. 5. from questions 31 and 32 above inyour WACC calculation Oa) 10.00% Ob.) 12.70% Oc) 8.1896 O d) 9.82%
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