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please help Cost of capital Edna Recording Studios, Inc, reported eamings avalable to common stock of 54,600,000 last year. From those earrings. the company paid
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Cost of capital Edna Recording Studios, Inc, reported eamings avalable to common stock of 54,600,000 last year. From those earrings. the company paid a dividend of 5123 on each of its 1,000,000 common shares oulstanding. The captal shuctire of the company indudes 45% debl tow proferrod stock, and 45% common slock. It is tavied at a mate or 28% a. If the market price of the common stock is 545 and dividends are expectod to grow at a rate of 9% per yeat for the toresecable future. What is the company's cost of reiained eamings francing? b. If underpricing and floeation costs en new ahares of common stock amount to 55 per thare. what is the compony's cost of new common stock financing? c. The company can issue $2.39 dividend prelerred slock for a thakkot price of $31 per shace. Flotason costs would amount to $5 per share. What is the cost of peoforred stock fonaicimen a. The company can ispue $1,000-parvalue approximale aftectax oc What a the WACC? a. If the makbt price of the common stock is $45 and dividends ave expected to grow at a rato of 9% per year for the foreseoable future, the cornpanys cost of retained eamings finaricing is (Round to two decimal places.) 6. If underpricing and flotabon cotts on new shares of corwnon stock amount to $5 per share, the comparys cost of new common siock financing is 6 . (Round to two decimal places) C. It the company can issue $2.39 dividend prelerred stock for a market price of $31 per thare, and fotation coss would amount to $5 per shave, the cost of preferred stock financing is (Round to two decmal places) d. If the company can issoe 51,000 -par-value, 6\% coupon, 10-year bonds that can be sold for 51,160 each, and fotason costs would amount to 530 per bond, uaing the estimation formula, the approwimate atter-tax cest of debt finaneing is y. (Round to two decimal places) e. Using the cost of retaned eaenings, rr the firm's WACC, rg is . (Round to two decinal places) Using the cost of new common stock, rm, the firmis WACC, ra is (K. (Round to two doaimal places.) Step by Step Solution
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