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Need help figuring out the cost of common stock for retained earnings with the attached information: Please show in excel format as it is required
Need help figuring out the cost of common stock for retained earnings with the attached information: Please show in excel format as it is required for assignment
Calculation of individual costs and WACC | |||
A. | Par Value of Bond | 1000 | |
Annual Coupon Rate | 7% | ||
Years until Maturity | 19 | ||
Current Price | 1,025.00 | ||
Flotation Cost | 2.00% | ||
Current Net Price | 1,004.50 | ||
Yield to Maturity | 7% | ||
Tax Rate | 0.24 | ||
After tax cost of Debt | 5.29% | ||
B. | Par Value of Preferred Stock | 100.00 | |
Dividend Rate | 7.5% | ||
Dividend amount | 7.5 | ||
Current Price | 90.00 | ||
Fee to Underwriters | 2.00 | ||
Net Price | 88.00 | ||
Cost of Preferred Stock | 8.52% | ||
C. | Cost of Retained Earnings | ???? | |
Dividend Paid 10 years ago | 2.25 | ||
Last Dividend Paid | 4.22 | ||
Dividend Growth Rate | 6.49% | ||
Current Market Price | 50.00 | ||
Discount | 3.00 | ||
Flotation Cost | 2.50 | ||
Net Price | $44.50 | ||
Cost of New Common Stock | 16.59% | ||
D. | |||
Cost of Retained Earnings | ????? | ||
Capital | Weight | Cost | |
Debt | 50.0% | 5.29% | |
Preferred Stock | 15.0% | 8.52% | |
Common Stock | 35.0% | 16.59% | |
WACC for Dillion labs | 9.73% |
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