Loli-Loli company producing poultry product.current capital structure of the company is $12million debt , $5million preferred stock and $25 common stock . Information Cost of debt before corporate tax is 9% The dividend of preferred stock is $2 with a market price of $10 It is expected the devidend of common stock will grow at 5% constantly with current dividend $0.50(D0) and the market price of &25 per share Based on the information given , calculate the cost of debt, the cost of preferred stock , the cost of common stocks and the weighted Average Cost of capital (WACC) with the assumption of corporate tax is 40%
Loli-Loli company producing poultry product.current capital structure of the company is $12million debt , $5million preferred stock and $25 common stock . Information Cost of debt before corporate tax is 9% The dividend of preferred stock is $2 with a market price of $10 It is expected the devidend of common stock will grow at 5% constantly with current dividend $0.50(D0) and the market price of &25 per share Based on the information given , calculate the cost of debt, the cost of preferred stock , the cost of common stocks and the weighted Average Cost of capital (WACC) with the assumption of corporate tax is 40%
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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Loli-Loli company producing poultry product.current capital structure of the company is $12million debt , $5million
Information
- Cost of debt before corporate tax is 9%
- The dividend of preferred stock is $2 with a market price of $10
- It is expected the devidend of common stock will grow at 5% constantly with current dividend $0.50(D0) and the market price of &25 per share
Based on the information given , calculate the cost of debt, the cost of preferred stock , the cost of common stocks and the weighted Average Cost of capital (WACC) with the assumption of corporate tax is 40%
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