Question
Urgent: Could you please show me the step by step work and formula for this problem? a. XYZ is going to issue a 5 Year
Urgent: Could you please show me the step by step work and formula for this problem?
a. XYZ is going to issue a 5 Year bonds which will pay $100 per year for 5 years and $1000 at the end of 5 years. The price for the bond is $919. What is the return if you buy the bond?
b. XYZ preferred stock with a par value of $100 and a dividend payment of $12 per share. The price of the preferred stock is $96 . Tax rate is 40% what is the before cost of preferred stock and the after cost of preferred stock?
c. XYZ stock price is $110. It has a constant growth rate of 10% and the next expected dividend is a $1.100. What is the cost of equity capital?
d. XYZ beta is 1.5, the risk free rate is 6% and the expected return on the market is 12%. What is the cost of equity capital?
e. XYZ is financed 30% by debt, 20% by preferred stock and the tax rate is 40%, Calculate the weighted average cost of capital.
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