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solve the following task below 6. A firm just announced a new preferred stock issue. The preferred dividend, which will be paid in perpetuity, is

solve the following task below

6. A firm just announced a new preferred stock issue. The preferred dividend, which will be paid in perpetuity, is expected to be $2. The return required by shareholders is 9.5%. What is the cost of preferred equity as a percent? (Round to the nearest hundredth.)_______

7. A company is planning to issue a new $1,000 face-value bond that will mature in 15 years. The bond will be priced at 101% of face value, and the annual coupon rate is 8%. Flotation costs are expected to sum to 3%. What is the before-tax cost of debt as a percent? (Round to the nearest hundredth.)__________________

8. Suppose a company is valued by the market at $60 million and is financed with both debt and equity. Currently, the company has a market value of equity of $10 million. The company also has a market value of short-term debt of $15 million and a market value of long-term debt of $35 million. The cost of equity is 17%, the cost of short-term debt is 9%, and the cost of long-term debt is 11%. If the marginal tax rate is 34%, what is the weighted-average cost of capital? (Round to the nearest hundredth.)_____________

9. Suppose a company is valued by the market at $100 million and is financed with both debt and common equity. Currently, the company has a market value of equity of $50 million, of which the company is financed with $10 million of external equity and $40 million of internal equity. The company also has a market value of short-term debt of $25 million and a market value of long-term debt of $25 million. The cost of equity is 15%, the cost of short-term debt is 7%, and the cost of long-term debt is 8%. Further, flotation costs on the external equity have summed to 4%. If the marginal tax rate is 40%, what is the weighted-average cost of capital? (Round to the nearest hundredth.)____________

9. Suppose a firm is looking to calculate the cost of common equity using the arithmetic mean return for the companys stock over the past six years. The company reported returns of 13.5%, 15.4%, 8.4%, 19.1%, 22.1%, and 4.3% over the last six years. Given this information, what is the cost of common equity as a percent? (Round to the nearest hundredth.)___________

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