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please answer without programmable calculator i swear i will upvote, please answer both quickly Q. 2 Cost of capital. Assume the following capital structure for

please answer without programmable calculator i swear i will upvote, please answer both quickly image text in transcribed

Q. 2 Cost of capital.

Assume the following capital structure for Al Amal Company:

Bonds $ 40000

Preferred stock $15000

Common stock $45000

1- The firm can raise debt by selling 1,000 par value,10% coupon interest rate of 10 years bond.

to sell the issue, an average discount of $30 per bond must be given. The firm must also pay floatation cost of $ 20 per bond.

2- The firm can sell 11% (annual dividend) preferred stock at its par $100 per share. The cost of issuing and the selling preferred stock is expected to be $ 4 per bond.
3- The firms common stock is currently selling for $80 per share. The firm expects to pay cash dividends of $6 per share next year. The firms dividend have been growing at an annual rate of 6%. The stock will have to be under-priced by $4 per share, and flotation cost expected to amount to $ 4 per share.
4- Calculate the weighted average cost of capital for Al AmalCompany. ).
You have $50000 to invest in either asset X or asset Y. Probability and possible returns of the two asset are given below. Calculate the expected rate of return and the standard deviation of each asset and decide which asset is more risky. Asset X Asset Y Probability return probability return 0.25 6.5% 0.25 3.5% 0.50 7.5% 0.50 7.5% 0.25 8.5% 0.25 4.5%

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