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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- A corporation recently purchased some preferred stock that has a before-tax yield of 10.00%. The company has a tax rate of 25%. What is the after-tax return on the preferred stock? Assume a 50% dividend exclusion for taxes on dividends. (Round your final answer to two decimal places.) Ⓒa. 6.25% b. 8.75% c.2.50% d. 7.50% e. 5.00%Dyson Inc. Perpetual preferred stock sells for $75 per share, has a par value of $100, and pays a $10 annual dividend. Assuming a marginal tax rate of 25 percent, what is Dyson's cost of issuing new preferred stock for use in calculating its weighted average cost of capital (WACC)? https://sju.instructure.com/files/4778254/download?download frd-1 O 12.37 percent O 13.33 percent O 10.31 percent O 13.75 percent O 10.00 percentFantana 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 12, 800 shares of common stock outstanding at a price per share of $70 and the rate of return on the stock is 11.41 percent. The value of Jerry Jeff's debt is $373, 230 and the required rate of return on the debt is 6.03 percent. What is the Jerry Jeff's WACC if the tax rate is 21 percent? A. 8.89% B. 9.83% C. 9.46% D. 8.72%You are given the following information for Lighting Power Company. Assume the company's tax rate is 21 percent. Debt: Common stock: Preferred stock: 24,000 shares of 4.8 percent preferred stock outstanding, a $100 par value, currently selling for $93 per share. 5 percent market risk premium and 5.3 percent risk-free rate. What is the company's WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Market: 21,000 7 percent coupon bonds outstanding, $1,000 par value, 22 years to maturity, selling for 108 percent of par; the bonds make semiannual payments. WACC 540,000 shares outstanding, selling for $72 per share; the beta is 1.18. %The ordinary shares of ABC Company are currently trading at $6. A new share would be made at an offer price of $5.90. Issue costs are expected to be 4% of the proceeds of the issue. The last dividend was $0.60 and the next dividend is due a year from now. The estimated growth rate is 4% p.a. What is ABC Company's after tax cost of an ordinary share issue is: Select one: A. 15% B. 13% C. 16% D. 14%
- 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 $64.29
- You are given the following information for Lighting Power Company. Assume the company's tax rate is 25 percent. Debt: Common stock: 430,000 shares outstanding, selling for $61 per share; the beta is 1.12. 18,500 shares of 3.7 percent preferred stock outstanding, a $100 par value, currently selling for $82 per share. 6 percent market risk premium and 4.7 percent risk-free rate. What is the company's WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g.. 32.16.) Preferred stock: Market: 10,000 5.9 percent coupon bonds outstanding. $1,000 par value, 25 years to maturity, selling for 107 percent of par; the bonds make semiannual payments. WACC %A 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%?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?