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pls help with these!! will give good rating (Estimated time allowance: 27 minutes) TEA Corp. is a grocery store located in the Northwest. The company
pls help with these!! will give good rating
(Estimated time allowance: 27 minutes) TEA Corp. is a grocery store located in the Northwest. The company plans to pay an annual dividend of $8.00 next year to its shareholders and plans to increase the dividend annually at the rate of 5.0% forever. It currently has 500,000 common shares outstanding. The shares currently sell for $100 each. TEA Corp. also has 25,000 semiannual bonds outstanding with a coupon rate of 9.7677%, a maturity of 30 years, and a par value of $1,000. The bonds currently have a yield to maturity (YTM) of 8%. The corporate tax rate is 20%? Use 4 decimals in all your calculations (round final answers to two decimals). 1. What is the cost of debt for TEA Corp.? Enter using the %, for example if you obtain 0.20 then enter 20% A 2. How many interest payments are left for the bond of TEA A 3. What is the interest payment per period for the Corp.? Corp.? A 3. What is the interest payment per period for the bond? Do not enter dollar sign. Round to two decimals A 4. What is the discount rate per period to use in pricing the bonds? Enter using the %, for example if you obtain 0.105 then enter 10.50% A 5. What is the market value of equity for the calculation of the WACC for TEA? Do not enter dollar sign. Round to the nearest dollar (no decimals). Use comma to separate thousands. A 6. What is the cost of equity for TEA? Enter using the % and TWO decimal places, for example if you obtain 4.20% then enter 4.20% A What is the market value of debt to be used in the calculation of the WACC for TEA? Do not enter dollar sign. Round to the nearest dollar (no decimals). Use comma to separate thousands. A What is the value of E/V? Enter using the % and TWO decimal places, for example if you obtain 4.20% then if you obtain 4.20% then enter 4.20% Ay What is the market value of debt to be used in the calculation of the WACC for TEA? Do not enter dollar sign. Round to the nearest dollar (no decimals). Use comma to separate thousands , What is the value of E/V? I Enter using the % and TWO decimal places, for example if you obtain 4.20% then enter 4.20% What is weighted average cost of capital (WACC) for TEA Corp.? Enter using the % and TWO decimal places, for example if you obtain 4.20% then enter 4.20% A/ Step by Step Solution
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