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QUESTION 13 10 points Seven [CLO-3] The activities of Trade Corp are financed by debt common stock, and preferred stock as follows: Debt 112.000 5

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QUESTION 13 10 points Seven [CLO-3] The activities of Trade Corp are financed by debt common stock, and preferred stock as follows: Debt 112.000 5 percent coupon bonds outstanding with par value of $1,000 and 15 years to maturity, selling for 106 percent of par, the bonds make semimanual payments Common stock 6,000,000 shares outstanding selling for 541 per share the beta is 1.30 Preferred stock 200.000 shares of 4.2 percent preferred stock outstanding, currently selling for 102 per share (par value=100). Market 12 percent expected market return 3 percent risk-free rate. The company's tax rate is 25 percent A What are the market values of the individual capital components (Debt. common stock and preferred stock as well as the total market value of the firm) (2 marks] 3. What are the capital structure weights21 marko What is the cost of common stock? Q marks) D. What is the cost of preferred stock? (1 marka What is the after tax cost of debt?2 marks What is the weighted average cost of capital? (2 marks) For the toolbar, press ALT F10 (PC) OF ALT+FN+F10 (Mac) BIUS Paragraph Arial 14px XO > 111 A a 2 a T

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