Granville Co. recently purchased several shares of Kalvaria Electronics' preferred stock. The preferred stock has a before-tax yield of 8.60%. If the company's tax rate is 15%, what is Granville Co.'s after-tax yield on the preferred stock? Assume a 70% dividend exclusion for tax on dividends.
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- Crane Luxury Liners has preferred shares outstanding that pay an annual dividend equal to $30 per year. If the current price of Crane preferred shares is $176.47, what is the after-tax cost of preferred stock for Crane? - After tax cost of preferred stock?General AccountingFantana Company’s preferred stock currently sells for $100.00 per share, and it pays an $6.00 annual dividend. If the company were to sell a new preferred issue, it would incur a flotation cost of 6.00% of the issue price. The company's tax rate is 32%. What is Fantana Company's cost of preferred stock? 6.72% 6.53% 6.88% 7.12% 6.38%
- Jerry Jeff, Inc. has 14,900 shares of common stock outstanding at a price per share of $77 and the rate of return on the stock is 11.69 percent. The value of Jerry Jeff's debt is $586,800 and the required rate of return on the debt is 6.17 percent. What is the Jerry Jeff's WACC if the tax rate is 21 percent? Multiple Choice 9.82% 8.53% 8.70% 9.38%You purchased CSH stock for $42 and it is now selling for $53. The company has announced that it plans a $11 special dividend. a. Assuming 2010 tax rates of 15% on dividends and capital gains, if you sell the stock or wait and receive the dividend, will you have different after-tax income? b. Assuming the capital gains tax rate is 21% and the dividend tax rate is 42%, if you sell the stock or wait and receive the dividend, will you have different after-tax income? If the after-tax income is different, why? a. Assuming 2010 tax rates of 15% on dividends and capital gains, if you sell the stock or wait and receive the dividend, will you have different after-tax income? (Select from the drop-down menu.) Assuming 2010 tax rates are 15% on capital gain and 15% on dividends, if you sell the stock or wait and receive the dividend, you have different after-tax income. b. Assuming the capital gains tax rate is 21% and the dividend tax rate is 42%, if you sell the stock or wait and receive the…Builtrite Auto has preferred stock shares outstanding that pay an annual dividend of $4 and are currently selling for $74 a share. What is the after-tax cost of preferred stock if the flotation cost for new shares is 5% and Builtrite is in the 34% marginal tax bracket? A) 5.41% B) 3.57% C) 5.69% D) 3.76%
- The common stock of Etar Company currently sells for $32.50 per share. In an attempt to determine whether Etar Company is fairly priced, you have assembled the following information: - The before-tax required rates of return on Etar debt, preferred stock and common stock are, respectively, 7.0%, 6.8%, and 11.0%. - The company's target capital structure is 30% debt, 15% preferred stock, and 55% common stock. - The market value of the company's debt is $145 million, and its preferred stock is valued at $65 million. - Etar's FCFF for the year just ended is $32 million. FCFF is expected to grow at a constant rate of 5% for the foreseeable future. - The tax rate is 30%. - Etar has 7.5 million outstanding common shares. What is Etar's estimated common stock value per share? Group of answer choices $76.00 $98.55 $82.02 $55.82 $64.29A firm is paying an annual dividend of $2.65 for its preferred stock that is selling for $57.00. There is a selling cost of $3.30. What is the after-tax cost of preferred stock if the firm's tax rate is 21%?Apollo has $5,000,000 outstanding of 8 percent preferred stock; the company has a 40 percent tax rate. What is the after-tax cost of the preferred stock? (Hint: ask yourself, does the issuing company get a tax break on preferred stock dividends?)
- bosio inc perpetual preferred stock sells for $97.50 per share, and it pays an $8.50 annual dividend. If the company were to sell a new preferred issue, it would incur a flotation cost of 4.00% of the price paid by investors. What is the company's cost of preferred stock for use in calculating the WACC?The shares of ABC Ltd have a market price of $4 and an annual dividend of 17.5 cents per share fully franked at the tax rate of 30 per cent. Calculate the dividend yield after company tax but before personal tax a. 16% b. 2.56% c. 6.25% d. It cannot be calculated as not enough information is providedHettenhouse Company's perpetual preferred stock sells for $103.00 per share, and it pays a $7.50 annual dividend. If the company were to sell a new preferred issue, it would incur a flotation cost of 5.00% of the price paid by investors. What is the company's cost of preferred stock for use in calculating the WACC? a. 7.28% b. 7.50% c. 7.66% Od. 8.23%