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Remaining Time: 1 hour, 03 minutes, 37 seconds. * Question Completion Status: QUESTION 13 Consider the following information for Costie Plc.: Debt : 70,000 outstanding
Remaining Time: 1 hour, 03 minutes, 37 seconds. * Question Completion Status: QUESTION 13 Consider the following information for Costie Plc.: Debt : 70,000 outstanding bonds with 8 percent coupon, a par value of $1,000,15 years to maturity, selling for 105 percent of par; the bonds make semiannual payments, and the current yield to maturity is 7.44 percent. Common stock : 375,000 shares outstanding, selling for $51 per share; the beta is 1.15. Preferred stock : 125,000 shares of 5.5 percent preferred stock outstanding, currently selling for $109 per share (par value=100). Market : 9 percent market risk premium and 5 percent risk-free rate. Assume the company's tax rate is 28 percent. A) Calculate the market value of each component of the capital structure (Debt, common stock, and preferred stock) as well as the total market value of the firm. B) Calculate the cost of equity. C) Calculate the after-tax cost of debt. D) Calculate the cost of preferred stock E) Calculate the weighted average cost of capital (WACC). For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BIUS Paragraph V Arial ( E 0: K KN X X (+) V 10pt Click Save and Submit to speed submit. Click Save All Answers to save all answers. 80 Q - HO + E v A v " MacBook Air 38 K Ix DII 58 L X $ A 88 F9 DA EXE 5 points Save Answer 0 WORDS POWERED BY TINY Save All Answers F10 3.8 8: 13 Save and Submit F11
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