What are the excel formulas for each of the problems?

Emrem Co. issued a dividend this morning for $1.75 per share. Analysts expect dividends to grow at 3.5% per year going forward. The price of Emrem Co. stock is currently $12.00. What is the implied equity cost of capital based on this information?

Dividend just issued

Expected growth rate

Current stock price

Implied cost of equity

 

Emrem Co. has issued a new bond. This bond has been issued at a $1,000 face value and annual coupon rate of 6.5% and is trading at a price that is 97% of face value. The bond has a maturity of 6 years and pays a coupon payment quarterly. For this bond calculate the number of periods to maturity, the bond price, coupon payment, YTM, and cost of debt.

T Term to maturity (years)

Face value

Annual coupon rate

Bond price (% of face value)

Coupon frequency (times per year)

Number of periods to maturity

Bond price

Coupon

YTM

Cost of debt

Cost of debt using EFFECT

 

Emrem Co. common stock has a beta value of 0.8, the risk free rate is 2.45% while the market portfolio risk premium has been calculated at 6.25%. Calcualte the cost of equity.

Beta

Risk free rate

Market portfolio risk premium

Cost of equity

 

The capital structure of Emrem Co. is comprised of 15% preferred stock, 30% debt, and 55% common stock. The required return for the preferred stock is 15%. The company has a tax rate of 22%. Use this information to calculate the WACC for Emrem Co.

Tax rate

Cost of debt

After tax cost of debt

Debt

Preferred stock

Common equity

WACC