Question
Target % in Capital Structure Debt 35% Preferred Stock 10% Equity 55% Tax Rate = 28% Outstanding Bond Preferred Stock Info Common Stock Info (Annual
| Target % in Capital Structure |
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| Debt | 35% |
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| Preferred Stock | 10% |
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| Equity | 55% |
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| Tax Rate = | 28% |
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| Outstanding Bond |
| Preferred Stock Info |
| Common Stock Info |
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| (Annual Coupons) |
| Preferred Divided | $3 | Current Dividend | $3 |
| Time to Maturity (years) | 15 | Current Market Price | $60 | Current Price | $50 |
| Coupon Rate APR | 5.00% |
| Expected Growth in Dividends | 2.54% | |
| Face Value | $1,000 |
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| Current Market Price | $1,240 |
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Using the information in the table, what is the firms cost of common stock?
State your answer as a percentage to two decimal place (e.g., 5.30)
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The Finance Book
Authors: Stuart Warner, Si Hussain
2nd Edition
1292401982, 978-1292401980
