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PLEASE SHOW ALL CALCULATIONS 27- Phillips Equipment has the following financial information: 80,000 bonds, par value is $1,000, coupon rate is 6%, semiannual pay mature
PLEASE SHOW ALL CALCULATIONS
27- Phillips Equipment has the following financial information: 80,000 bonds, par value is $1,000, coupon rate is 6%, semiannual pay mature in 10 years, price is 100% of par. 1,000,000 shares of 6 percent preferred stock. $100 par value per share, selling for S60 per share. 2.200,000 shares of common stock outstanding. Beta of 1.20. Sells for $50 a share. Recent annual dividend was $2 and projected growth rate is 6%. Other info: a. ment, b. c. d. i. The U.S. Treasury bill is yielding 4 percent. ii. Return on the market is 10 percent. ii. Corporate tax rate is 30 percent. iv. TAKE EVERYTHING TO 4 DECIMAL PLACES, e.g. 0.0123 or 1.23% a. What is the after-tax debt? b. What is the cost of preferred? c. What is the cost of equity using the CAPM? d. What is the cost of equity using the Gordon Growth Model? Calculate the weights for each of the three categories of capital based on the market value. e. . What is the firm's weighted average cost of capital Step by Step Solution
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