FIN 660 Computational HW 3

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University of Maryland Global Campus (UMGC) *

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660

Subject

Finance

Date

Apr 3, 2024

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xlsx

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20

Uploaded by MajorMoleMaster406

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1 diividend $2.26 growth rate 7.00% sell price per share $40.00 dividend next year $2.42 cost of equity 13.05% 2 common stock beta 1.60 risk free rate 3.00% expected return on market 11.00% cost of equity 15.80% 3 Stock in Daenerys Industries has a beta of 0.81. The market risk p beta 0.81 market risk premium 8.00% T-bills yielding 4.50% dividend $1.70 dividend growth rate 5.00% sell price per share $40.00 Growth model cost of equity 9.46% CAPM cost of equity 10.98% average cost of equity 10.22% 4 Holdup Bank has an issue of preferred stock with a $6 stated divid dividend $6.00 sell price per share $93.00 cost of equity 6.45% 5 time to maturity (yrs) 24.00 face value 92.00% embedded cost 4.00% tax rate 23.00% The Drogon Company just issued a dividend of $2.26 per share on The Rhaegel Corporation's common stock has a beta of 1.6. If the If the tax rate is 23 percent, what is the aftertax cost of debt?
payments per year 2.00 nper 48.00 pmt 20.00 pv -920.00 fv 1,000.00 rate 2.28% pretax cost of debt 4.55% aftertax cost of debt 3.50% 6 time to maturity (yrs) 30.00 payments per year 2.00 coupon rate (x) years ago 5.00% (x) 3.00 current price 94.00% tax rate 22.00% book value of debt issue $50,000,000.00 coupon bond (2) 0.00 time to maturity (yrs) (2) 7.00 book value of debt issue (2) $45,000,000.00 bonds sell 74.00% total book value of debt $95,000,000.00 total market value of debt $80,300,000.00 aftertax cost of debt 7 common stock outstanding 9,100,000.00 current share price $47.00 book value per share $4.00 1st bond face value $72,000,000.00 1st coupon 7.00% 1st sell % of par 95.00% 2nd face value $61,880,000.00 2nd coupon 7.00% 2nd sell % of par 99.40% 1st maturity (yrs) 10.00 2nd maturtiy (yrs) 7.00 What is your best estimate of the aftertax cost of debt? What is the company's capital structure weight of debt on a book v
weight of equity book value 0.2138 weight of debt book value 0.7862 eight of equity market value 0.7670 weight of debt market value 0.2330 8 Take It All Away has a cost of equity of 10.54 percent, a pretax cos cost of equity 10.54% pretax cost of debt 5.27% tax rate 21.00% capital structure book value 68.00% debt market value 28% after tax cost of debt 4.16% WACC 8.75% 9 Upton Umbrellas has a cost of equity of 11.2 percent, the YTM on t cost of equity 11.20% YTM 5.80% tax rate 21.00% sell % of par 93.20% debt book value $396,000.00 assets book value $948,000.00 market to book ratio 2.62 market value of equity $2,114,688.00 market value of debt $369,072.00 book value of equity $552,000.00 total value of equity $1,446,240.00 total value $1,815,312.00 after tax cost of debt 4.58% WACC 9.85% 10 Lannister Manufacturing has a target debt-equity ratio of 0.63. Its debt-equity ratio 0.63 cost of equity 20.00% cost of debt 11.00% tax rate 32.00% E/V 0.6135
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D/V 0.3865 after tax cost of debt 7.48% WACC 15.16% 11 debt 4,500.00 debt % coupon bonds 6.50% debt par value $1,000.00 debt ytm 21.00 debt % of par 102% debt payments per year 2.00 ommon stock shares outstanding 108,000.00 common stock sell price $57.00 common stock beta 1.07 preferred stock shares 13,000.00 preferred stock % outstanding 5.00% preferred stock sell price $103.00 market risk premium 8.50% market risk free rate 4.50% tax rate 32.00% number of periods 42.00 price of bond 1,020.00 semi annual coupon 32.50 semi ytm 3.16% ytm 6.33% market value of debt 4,590,000.00 cost of equity 0.14 market value of equity 6,156,000.00 market value of preferred stock 1,339,000.00 cost of preferred stock 0.05 total value of firm 12,085,000.00 WACC 9.10% Find the WACC.
premium is 8 percent, and T-bills are currently yielding 4.5 percent. The company's mo dend that just sold for $93 per share. What is the bank's cost of preferred stock? n its common stock. The company is expected to maintain a constant 7 percent growt risk-free rate is 3 percent and the expected return on the market is 11 percent, what
market value weight nper pmt pv 1st issue $47,000,000.00 58.53% 60.00 -25.00 2nd issue $33,300,000.00 41.47% 14.00 -60,000.00 $80,300,000.00 value basis? What is the company's capital structure weight of equity on a market va
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st of debt of 5.27 percent, and a tax rate of 21 percent. The company's capital structu the company's bonds is 5.8 percent, and the tax rate is 21 percent. The company's bo cost of equity is 20 percent, and its cost of debt is 11 percent. If the tax rate is 32 pe
ost recent dividend was $1.7 per share, and dividends are expected to grow at a th rate in its dividends indefinitely. If the stock sells for $40 a share, what is the c t is the company's cost of equity capital?
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fv 1,000.00 1,000.00 alue basis? What is the company's capital structure weight of debt on a market v
ure consists of 68 percent debt on a book value basis, but debt is 28 percent of t onds sell for 93.2 percent of par. The debt has a book value of $396,000 and tota ercent, what is the company's WACC?
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a 5 percent annual rate indefinitely. If the stock sells for $40 per share, what is yo company's cost of equity?
value basis?
the company's value on a market value basis. What is the company's WACC? al assets have a book value of $948,000. If the market-to-book ratio is 2.62 time
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our best estimate of the company's cost of equity?
es, what is the company's WACC?
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