Answered step by step
Verified Expert Solution
Question
1 Approved Answer
plz answer earlier its urgent i willl thankful Question no 2 IBM company's Stock and Bond information is provided below: Bond Time to Maturity: 20-years;
plz answer earlier its urgent i willl thankful
Question no 2 IBM company's Stock and Bond information is provided below: Bond Time to Maturity: 20-years; Annual Coupon Rate: 7.00%; PAR Va lu e: $1,000; Current ly trading at: $1,275.54 Preferred Stock Preferred Stock Price: $64.0 0; Pre ferred Annual Dividend: $3.50 Common Stock (Method 1) Equity Beta: JL 2; Risk-free Rate: 3.00%; Market Risk Pre m iu m: 6.00% Common Stock (Method 2) Long-run earnings growth: 7.00%; Expect ed Dividend (in one year): $2.10; Current Stock Price: $57.66 a) How much is IBM's cost of preferred stock? Enter your answer in the following format: 0.1 234!; Hint: Answer is between 0.0503 and 0.0591 B)How much is IBM's aft er -t ax cost of debt, if the corporate tax rate for the company is 25.0%? Enter your answer in the following format :0.1 234!; Hint: Answer is between 0.0311.8 and 0.0405 C)How much is IBM's cost of common stock? Enter your answer in the following format : 0.1 2341; Hint: Use 'M et hod!! Answer is between 0.0938 and 0.1132Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started