need to calculte the cost of debt
The Ivanhoe Products Co. currently has debt with a market value of $250 million outstanding. The debt consists of 9 percent coupon bonds (semiannual coupon payments) that have a maturity of 15 years and are currently priced at $1.423.92 per bond. The firm also has an issue of 2milli on preferred shares outstanding with a market price of $15.00 per share. The preferred shares pay an aninual dividend of $1.20. tvanhoe also has 14 million shares of common stock outstanding with a price of $2000 per share. The firm is expected to pay a $2.20 common dividend one year from today, and that dividend is expected to increase by 4 percent per year forever. If Ivanhoe is subject to a 28 percent marginal tax rate. Excel Template (Note: This template includes the problem statement as it appears in your textbook. The problem assigned to you here may have different values. When using this template, copy the problem statement from this screen for easy reference to the values you've been given here, and be sure to update any values that may have been pre-entered in the template based on the textbook version of the problem.) Problern 13.24 a1-a5 (Excel Video)(a1) Calculate the cost of debt. (Round intermediate calculations to 4 decimal places, eg. 1.2514 and final answer to 2 decimal places, eg. 15.25\%) Cost of debt % The Ivanhoe Products Co. currently has debt with a market value of $250 million outstanding. The debt consists of 9 percent coupon bonds (semiannual coupon payments) that have a maturity of 15 years and are currently priced at $1,423.92 per bond. The firm also has an issue of 2 million preferred shares outstanding with a market price of $15.00 per share. The preferred shares pay an annual dividend of $1.20. Ivanhoe also has 14 million shares of common stock outstanding with a price of $20.00 per share. The firm is expected to pay a $2.20 common dividend one year from today. and that dividend is expected to increase by 4 percent per year forever. If lvanhoe is subject to a 28 percent marginal tax rate. Excel Template (Note: This template includes the problem statement as it appears in your textbook. The problem assigned to you here may have different values. When using this template, copy the problem statement from this screen for easy reference to the values you've. been given here, and be sure to update any values that may have been pre-entered in the template based on the textbook version of the problem.) Calculate the weights for debt, common equity, and preferred equity. (Round final answers to 4 decimal places, eg. 1.2514.) Debt Preferred equity Common equity Attempts: 2 of 3 used Problem 13.24 a1-a5 (Excel Video)(a2) Calculate the cost of debt. (Round intermediate calculations to 4 decimal places, es. 1.2514 and final answer to 2 decimal places, es. 15.25\%.) Cost of debt \% Problem: WACC: The Imaginary Products Co. currently has debt with a market value of $300 million outstanding. The debt consists 9 percent coupon bonds (semiannual coupon payments) which have a maturity of 15 years and are currently priced at $1,440.03 per bond. The firm also has an issue of 2 million preferred shares outstanding with a market price of $12.00 per share. The preferred shares pay an annual dividend of $1.20. Imaginary also has 14 million shares of common stock outstanding with a price of $20.00 per share. The firm is expected to pay a $2.20 common dividend one year from today, and that dividend is expected to increase by 5 percent per year forever. If Imaginary is subject to a 28 percent marginal tax rate, then what is the firm's weighted average cost of capital? Unknown: Weighted Average Cost of Capital = WACC. Assumption(s) Par or face value of bond is $1,000. Annual growth rate of stock dividend has annual compounding
