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Remaining Time: 1 hour, 28 minutes, 50 seconds. * Question Completion Status: > Moving to another question will save this response. Question 34 of 52
Remaining Time: 1 hour, 28 minutes, 50 seconds. * Question Completion Status: > Moving to another question will save this response. Question 34 of 52 Question 34 25 points Save Ana A firm has provided the following information about its current capital structure: Debt: The firm just issued an 8-year, $1,000 par value, 6 percent (paid semi-annual) coupon bond. The current mark price of the bond is $985, and there are 1,000 bonds outstanding. The firm has a marginal tax rate of 36%. Preferred Stock: The company has not issued and does not plan to issue any preferred stock. Common Stock: A firm's common stock is currently selling for $92 per share, and there are 7,138 shares oustanding. The most recent dividend paid was $9. Dividends are expected to grow at a constant 5% rate indefinitely. Given the information above, calculate the following (show your work and inputs for partial credit): a. [9 points] Calculate the firm's after tax cost of debt, rd(1-T) b. [5 points) Calculate the cost of existing common stock (using the constant growth dividend discount model).rs c. [6 points] Calculate the weights of debt and equity, wd and wc d. [5 points) Calculate the firm's WACC (weighted average cost of capital) For the toolbar, press ALT+F10 (PC) or ALT-EN-F10 (Mac). B I U S Paragraph V Arial 14px Type here to search O TE 100%
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