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company's tax rate is 21 percent. Debt: 8,100, 6.9 percent coupon bonds outstanding. $1,000 par value, 17 years to maturity, selling for 101 percent of par, the bonds make semiannual payments. Common stock: 175,000 shares outstanding, selling for $77 per share, beta is 1.32 Preferred stock: 9,000 shares of $7.50 preferred stock outstanding, currently selling for $73 per share. Market: 7.9 percent market risk premium and 3.6 percent risk-free rate.

company's tax rate is 21 percent. Debt: 8,100, 6.9 percent coupon bonds outstanding. $1,000 par value, 17 years to maturity, selling for 101 percent of par, the bonds make semiannual payments. Common stock: 175,000 shares outstanding, selling for $77 per share, beta is 1.32 Preferred stock: 9,000 shares of $7.50 preferred stock outstanding, currently selling for $73 per share. Market: 7.9 percent market risk premium and 3.6 percent risk-free rate.

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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Given the Tomowing momION Orat company's tax rate is 21 percent. Debt: 8,100, 6.9 percent coupon bonds outstanding. $1,000 par value, 17 years to maturity, selling for 101 percent of par, the bonds make semiannual payments. Common stock: 175,000 shares outstanding, selling for $77 per share, beta is 1.32 Preferred stock: 9,000 shares of $7.50 preferred stock outstanding, currently selling for $73 per share. Market: 7.9 percent market risk premium and 3.6 percent risk-free rate. Multiple Choice ☐ 10.4% О 12.0% О 12.4% ☐ 10.7% ○ 9.8%
Transcribed Image Text:Given the Tomowing momION Orat company's tax rate is 21 percent. Debt: 8,100, 6.9 percent coupon bonds outstanding. $1,000 par value, 17 years to maturity, selling for 101 percent of par, the bonds make semiannual payments. Common stock: 175,000 shares outstanding, selling for $77 per share, beta is 1.32 Preferred stock: 9,000 shares of $7.50 preferred stock outstanding, currently selling for $73 per share. Market: 7.9 percent market risk premium and 3.6 percent risk-free rate. Multiple Choice ☐ 10.4% О 12.0% О 12.4% ☐ 10.7% ○ 9.8%
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