The company Farmacias SA de CV has the following capital structure, in its balance sheet at the moment

Total debt for $ 120 million with a cost after taxes equal to that calculated in Problem # 1: 4,559,725 outstanding preferred shares that were issued with a preferential dividend of 9.5% over their nominal value of $ 6.25, which were sold at a price of $ 6.10, with float costs of $ 1 50 each 12,759,850 common shares outstanding at a present value of 5,745 each

$ 55,600,000 in retained earnings The company's beta coefficient is 12; the market risk premium is estimated at 5.7% and the risk-free rate is 8% Consider that the company requires additional financing for $ 75 million and has the following alternatives for this additional financing A bank line of credit that amounts to $ 9,045 million with a cost after taxes of 9.10%

You can issue new common shares for an amount of up to $ 18,930,000 with a sale price of $ 6.95 and float costs $ 2.50, the which are expected to pay a dividend of 50 45 per share, it is estimated that the growth rate of dividends in the future will be 7.5% per year

Calculate

1. The average cost of capital weighted according to the financial structure

current company:

2. The breakpoints 3. The new weighted average cost of capital for each additional financing interval Note consider all effective annual rates

Problem 1 The company Farmacias SA de CV issued debt bonds for 15 years with a nominal value of $ 100 each and interest coupons payable every year at 11% per annum compounded semi-annually with a sale price of $ 95.60 and floating costs of $ 4 per bond, the tax rate paid by the company is 30% Calculate the cost of debt after taxes (not approximate).