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NEED HELP FILLING IN THE REST OF THE EMPTY SPACES. THANKS! 4 Below is information regarding the capital structure of Micro Advantage Inc. On the
NEED HELP FILLING IN THE REST OF THE EMPTY SPACES. THANKS!
4 Below is information regarding the capital structure of Micro Advantage Inc. On the basis of this information you are asked to respond to the following three questions: Requirec 1. Micro Advantage issued a $5,300,000 par value, 20-year bond a year ago at 98 (ie, 98% of par value) with a stated rate of 8%. Today, the bond is selling at 105 (i.e., 105% of par value). If the firm's tax bracket is 25%, what is the current after-tax cost of this debt? 2. Micro Advantage has $5,300,000 preferred stock outstanding that It sold for $22 per share. The preferred stock has a per share par value of $24 and pays a $5 dividend per year. The current market price is $25 per share. The firm's tax bracket is 30%, what is the after-tax cost of the preferred stock? 3. In addition to the bonds and preferred stock described in requirements 1 and 2, Micro Advantage has 80,000 shares of common stock outstanding that has a par value of $10 per share and a current market price of $170 per share. The expected after-tax market return on the firm's common equity is 20%. what is Micro Advantage's weighted-average cost of capital (WACC)? 0.25 points Answer is not complete. Complete this question by entering your answers in the tabs below Required 1 Required 2Required 3 In addition to the bonds and preferred stock described in requirements 1 and 2, Micro Advantage has 80,000 shares of common stock outstanding that has a par value of $10 per share and a current market price of $170 per share. The expected after-tax market return on the firm's common equity is 20%-what is Micro Advantage's weighted-average cost of capital (WACC)? (Round "Interest or Dividend Rate", "After-tax Rate or Expected Return" and "Cost of Capital Components" to 2 decimal places (i.e. .1234 12.34%), "weights" to 3 decimal places, and other answers to the nearest whole dollar amount.) Show less After-tax Rate o Cost of Ca Current Market Values Book Value Weights Dividend Rate Bond 5,300,000 5,300,000 800,000 11,400,000 Stock 20.00 % Stock Total 0.000 0.00 Required 2 Required3Step by Step Solution
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