Question
The BEAR Company has 1,500 bonds outstanding that have a market price of $970 each. floatation cost is 0.016 the bond pays coupon of 0.04
The BEAR Company has 1,500 bonds outstanding that have a market price of $970 each. floatation cost is 0.016 the bond pays coupon of 0.04 semiannually for 19 years. The company also has 5,000 shares of preferred stock at a market price of $40 and dividends 0.8 each. The common stock is priced at $32 a share it is undervalued by $2 and there are 36,000 shares outstanding, the stock is expected to pay $2.5 and will continue to grow at a rate Of 0.065 . TAXES ARE 0.3
what is the cost of debt after tax? what is the cost of PS what is the cost of common stock?
what is the weight of the bond
what is the weight of the stock
what is the weight of preferred stock what is the WACC?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started