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On February 21,2023 , you were asked to demonstrate your knowledge in corporate finance. One f your tasks is to calculate the cost of capital

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On February 21,2023 , you were asked to demonstrate your knowledge in corporate finance. One f your tasks is to calculate the cost of capital for JKM. In order to calculate the cost of capital, it s necessary to accurately assess the capital structure of the company. Below is information for stimating the cost of capital for JKM Company. Part I a. The bonds have a 6 percent annual coupon rate, payable semiannually, and a par value of $1,000. The bonds were issued in 2020 and will mature in 2030 . The yield to maturity is 12 percent. What is the current market value of the firm's bonds? b. The Company has been growing at a 10% rate for several years, and it just paid a dividend of D0$3.00 in December 2022. Due to a new product introduction, JKM expects to achieve an increase in its short-run growth rate of 20 percent annually for the next 2 years. After that time, growth rate is expected to return to the longrun constant rate of 5 percent forever. If the rate of return of equity is 15%, what would be the market value of equity? c. What should the dividend yield be today? d. Currently, the preferred stock is selling for $12 per share, what would be the market value of the preferred stock today assuming the dividend per share on preferred stock is $1.68. e. What is the required rate of return on the preferred stock? f. What is the market value capital structure of the company? g. What is the Weighted Average Cost of Capital (WACC) if the tax rate of 25%

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