what will be the firm's operating cycle? Section B You are given the following information for a firm Coommon stock 265,000 shares of common stock selling for $76 per share the stock has beta of 0.92 and will pay a dividend of S2.48 next year the dividend is expected to grow by 4 percent per year indefinitely Preferred stock 7.500 shares of common preferred stock (par value $100%selling at 888 per share debt 8500 units of 7.1 percent coupon bonds outstanding with 14 years to maturity and a quoted prcice of 102.6%.these bods pay interest semi-annually. Market A 13.2 precent expected return a 4.5 percent risk free rate and a 34 percent tax rate. Required A calculate the market value of common stock .preferred stock ,bond and the total market value of the firm B. Calculate the cost of common stock using Constant dividend growth model (CDGM)and capital assets price model (CAPM) respectively.what is the average cost of common stock based on these two models? C.calculate the cost of preferred stock. D. Calculate (1)cost of debt before tax and (ii)cost of debt after tax. E.calculate the weight of common stock(We).the weight of preferred stock(Wpand the weight of debt(Wd)with repect to the total capital. F.calculate the weight average of cost of capital (WACC) Question b2 what will be the firm's operating cycle? Section B You are given the following information for a firm Coommon stock 265,000 shares of common stock selling for $76 per share the stock has beta of 0.92 and will pay a dividend of S2.48 next year the dividend is expected to grow by 4 percent per year indefinitely Preferred stock 7.500 shares of common preferred stock (par value $100%selling at 888 per share debt 8500 units of 7.1 percent coupon bonds outstanding with 14 years to maturity and a quoted prcice of 102.6%.these bods pay interest semi-annually. Market A 13.2 precent expected return a 4.5 percent risk free rate and a 34 percent tax rate. Required A calculate the market value of common stock .preferred stock ,bond and the total market value of the firm B. Calculate the cost of common stock using Constant dividend growth model (CDGM)and capital assets price model (CAPM) respectively.what is the average cost of common stock based on these two models? C.calculate the cost of preferred stock. D. Calculate (1)cost of debt before tax and (ii)cost of debt after tax. E.calculate the weight of common stock(We).the weight of preferred stock(Wpand the weight of debt(Wd)with repect to the total capital. F.calculate the weight average of cost of capital (WACC) Question b2
