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Please show all work! Question 1 The ABC Corporation has reported earnings available to common stock of $4,200,000 last year. The following information applies to
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Question 1 The ABC Corporation has reported earnings available to common stock of $4,200,000 last year. The following information applies to the company. Dividend (preferred stock) $2.00 #of outstanding shares 1,000,000 Market price of Common stock $40.00 Growth rate 6% Flotation on new common stock $7.00 Dividend common stock) $1.26 Market price of Preferred stock $25.00 Flotation on Preferred stock $3.00 Par value (debt) $1,000 Coupon rate 10% term 5 years Current price of bond $1,200 flotation $25.00 per bond Tax rate 40% The current Balance sheet for the firm indicates the following: Long-term debt $6,000,000 Preferred stock $1,500,000 Common Equity $7,500,000 Questions What is the cost of debt? What is the cost of preferred stock? What is the cost of Common equity, Internal? What is the cost of new common equity? What is the WACC before breaks What is the breakpoint? What is the MCC, (after breakpoint)Step by Step Solution
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