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Need help finding a b c and d if possible without using excel thanks! 7. You are estimating McDonalds weighted average cost of capital. McDonalds
Need help finding a b c and d if possible without using excel thanks!
7. You are estimating McDonalds" weighted average cost of capital. McDonalds finances 17% of capital with debt and 83% with common stock. McDonald's tax rate is 21%. (Notice these are the same numbers in 3, 4 and 6) McDonalds will raize debt capital with the bond from #4: Price 123.6, coupon 6.3% maturity 2049. Underwriters will charge 1% to issue McDonalds' bonds. McDonalds has a beta of 0.82. The risk free rate is 2% and the market risk premium is 6%. McDonald's stock had a dividend paid in time 0 of 53.71 and assume estimated growth is 4% per year. (growth rate is different from #6 above) and the stock price is $167. Underwriters will charge 4% to issue McDonalds common stock. What is the Net Proceeds of the bond issue? a. b. What is the cost of debt financing for McDonalds ? c. What is McDonalds" estimated cost of stock using CAPM? . d. What is the estimated cost of stock (retained earninga) using constant dividend growth model? What is the net proceeds on the stock issue from if McDonalds issued new common stockStep by Step Solution
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