question 2 a) Fr berhad has 6.5 million shares of common stock outsdanding with a market price of RM14 per share. This company has a market value of RM10 million outstanding preferred stock. their corporate bonds outstanding is 25,000 with face value of RM1000 and selling at 90% of face value on the bond market.The cost of equity is 14%, the cost preferred is 10% and the pre- tax cost of debt is 7.5%. Their marginal corporate tax rate is 30%. i) Calculate the market value for common stoc preferred stock, corporate bond and firm. ii)calculate the firm's Weightage average cost of capital (WACC).
question 2 a) Fr berhad has 6.5 million shares of common stock outsdanding with a market price of RM14 per share. This company has a market value of RM10 million outstanding preferred stock. their corporate bonds outstanding is 25,000 with face value of RM1000 and selling at 90% of face value on the bond market.The cost of equity is 14%, the cost preferred is 10% and the pre- tax cost of debt is 7.5%. Their marginal corporate tax rate is 30%. i) Calculate the market value for common stoc preferred stock, corporate bond and firm. ii)calculate the firm's Weightage average cost of capital (WACC).
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
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a) Fr berhad has 6.5 million shares of common stock outsdanding with a market price of RM14 per share. This company has a market value of RM10 million outstanding
i) Calculate the market value for common stoc preferred stock, corporate bond and firm.
ii)calculate the firm's Weightage average cost of capital (WACC).
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