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Question (1) Aaron's Rentals has 50,000 shares of common stock outstanding at a market price of $30 a share. The common stock just paid a
Question (1) Aaron's Rentals has 50,000 shares of common stock outstanding at a market price of $30 a share. The common stock just paid a $1.5 annual dividend and has a dividend growth rate of 3 percent. What is the total market value of the common stock? What is the cost of equity (common stock)? Question (2) There are 30,000 shares of 6 percent preferred stock outstanding at a market price of $50 a share. What is the total market value of the preferred stock? What is the cost of preferred stock? Question (3) The outstanding bonds mature in 15 years, have a total face value of $500,000, a face value per bond of $1,000, and a market price of $1,020 each. The bonds pay 8 percent interest, semiannually. What is the total bond market value? What is the cost of debt? Question (4) According to the results from (1)-(3), The weight of equity (common stock) = The weight of preferred stock = The weight of debt = Question (5) The tax rate is 12 percent, what is the firm's weighted average cost of capital (WACC)=
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