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Problem 2. (9 points ). You have the following information for Miller Mining Inc. Miller common stock just paid a dividend of $5 per share
Problem 2. (9 points ). You have the following information for Miller Mining Inc. Miller common stock just paid a dividend of $5 per share and sells for $60 per share. The common dividend is expected to grow at a constant rate of 6 percent in the future. Miller preferred shares pay a dividend of $2.50 per share and sell for $50 per share. Miller's debt consists of bonds that have a coupon rate of 5 percent and yield 4 percent. Calculate the cost of equity financing, cost of preferred stock financing, after-tax cost of debt, and weighted average cost of capital for Miller Mining. The corporate tax rate is 40 percent
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