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1 Calculate the Marginal Cost of Capital. 2 Common Stock Price 3 Preferred Stock Price 4 Price per Bond ($1000 par) 5 Common Stock Shares 6 Preferred Stock Shares 7 Bonds Outstanding 8 Bond Coupon Rate 9 Time Until Maturity 10 Tax Rate 11 Par Value Preferred

1 Calculate the Marginal Cost of Capital. 2 Common Stock Price 3 Preferred Stock Price 4 Price per Bond ($1000 par) 5 Common Stock Shares 6 Preferred Stock Shares 7 Bonds Outstanding 8 Bond Coupon Rate 9 Time Until Maturity 10 Tax Rate 11 Par Value Preferred

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Debt: XYZ issues 100 10-year bonds selling at $970 with a par of $1000. They have a coupon of 10% paid semiannually. Preferred Stock: XYZ issues 1000 shares of preferred stock selling at $50 with an annual dividend of 5% based on $100 par. Common Stock: XYZ issues 10000 common shares at $7. XYZ just paid a dividend of $0.25. Investors require a 200% return. Other relevant information: Taxes are at 20%. Assume no flotation costs. Dividends have been paid over the past 5 years: 1 $0.01 $0.02 3 $0.04 4 $0.08 $0.16 Place all data, ratios, calculations, findings, etc. in the first Excel sheet with references to the information in other sheets.
Transcribed Image Text:Debt: XYZ issues 100 10-year bonds selling at $970 with a par of $1000. They have a coupon of 10% paid semiannually. Preferred Stock: XYZ issues 1000 shares of preferred stock selling at $50 with an annual dividend of 5% based on $100 par. Common Stock: XYZ issues 10000 common shares at $7. XYZ just paid a dividend of $0.25. Investors require a 200% return. Other relevant information: Taxes are at 20%. Assume no flotation costs. Dividends have been paid over the past 5 years: 1 $0.01 $0.02 3 $0.04 4 $0.08 $0.16 Place all data, ratios, calculations, findings, etc. in the first Excel sheet with references to the information in other sheets.
1 Calculate the Marginal Cost of Capital. 2 Common Stock Price 3 Preferred Stock Price 4 Price per Bond ($1000 par) 5 Common Stock Shares 6 Preferred Stock Shares 7 Bonds Outstanding 8 Bond Coupon Rate 9 Time Until Maturity years 10 Tax Rate 11 Par Value Preferred 12 Dividend Rate Preferred 13 Common Div (D1) 14 Common Growth Rate 15 Risk-free Rate 16 Beta 17 Exp Ret Mkt 18 Risk Premium on Stocks over Bonds
Transcribed Image Text:1 Calculate the Marginal Cost of Capital. 2 Common Stock Price 3 Preferred Stock Price 4 Price per Bond ($1000 par) 5 Common Stock Shares 6 Preferred Stock Shares 7 Bonds Outstanding 8 Bond Coupon Rate 9 Time Until Maturity years 10 Tax Rate 11 Par Value Preferred 12 Dividend Rate Preferred 13 Common Div (D1) 14 Common Growth Rate 15 Risk-free Rate 16 Beta 17 Exp Ret Mkt 18 Risk Premium on Stocks over Bonds
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