Question
Suppose that you are trying to estimate your firm's cost of capital and you collect the following information: your firm's beta is 0.87; b.
Suppose that you are trying to estimate your firm's cost of capital and you collect the following information: your firm's beta is 0.87; b. a firm similar to yours has just issued 10 year corporate A rated bonds with a 5% coupon for $98.5; a. your firm's 6% preferred stock is trading at $97; d. 10 year Treasuries are currently trading at yield to maturity of 4%; e. analysts are expecting the S&P 500 to yield 6% next year and this yield to grow at roughly 4% over the foreseeable future; the S&P 500 index is currently 1190.44. C. f. What is the firm's cost of equity, its cost of debt (before tax) and its cost of preferred stock?
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Get StartedRecommended Textbook for
Applied Corporate Finance
Authors: Aswath Damodaran
4th edition
978-1-118-9185, 9781118918562, 1118808932, 1118918568, 978-1118808931
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