Question
Question 28-35 Westfield Enterprises value is $500,000. Its debt is $100,000. Preferred stock is $50,000. Its 30-year bond is currently sold at $1,050. The coupon
Question 28-35
Westfield Enterprises value is $500,000. Its debt is $100,000. Preferred stock is $50,000. Its 30-year bond is currently sold at $1,050. The coupon rate is 8%. It just paid $2 dividend for preferred stock holders last quarter. The dividend they just paid to their shareholders was $1.5. We expect the dividend growth rate is 4% annually. The current market price of a common stock is $15, and the preferred stock is currently traded at $80. The corporate tax rate for Westfield Enterprise is 35%. The 3-month T-Bill is 3%. Westfield Enterprise has the beta of 2.5. The market return is expected to be 8% per year.
28. What is the weight of debt?
29. What is the weight of preferred stock ?
30. what is the Weight of common stock ?
31. what is the cost of debt?
32. what is the cost of preferred stock ?
Step 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