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need answer of all the parts i.e. a, b and c. for part A use the following formula: BV=C[1-(1+r)-t/r]+F/(1+r)t Question 3: Blooming Ltd. currently has

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need answer of all the parts i.e. a, b and c. for part A use the following formula: BV=C[1-(1+r)-t/r]+F/(1+r)t

Question 3: Blooming Ltd. currently has the following capital structure: Debt: $2,500,000 par value of outstanding bond that pays annually 12% coupon rate with an annual before-tax yield to maturity of 10%. The bond issue has face value of $1,000 and will mature in 25 years. Ordinary shares: 65,000 outstanding ordinary shares. The firm plans to pay a $7.50 dividend per share in the next financial year. The firm is maintaining 3% annual growth rate in dividend, which is expected to continue indefinitely. Preferred shares: 40 000 outstanding preferred shares with face value of $100, paying fixed dividend rate of 14%. Company tax rate is 30% Required: Complete the following tasks: Only work on questions a, b and c a) Calculate the current price of the corporate bond? b) Calculate the current price of the ordinary share if the average return of the shares in the same industry is 9%? c) Calculate the current value of the preferred share if the average return of the shares in the same industry is 12%

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