what is the cost of debt after tax? what is the cost of PS what is the cost of common stock? what is the weight of the bond what is the weight of the stock what is the weight of preferred stock what is the WACC?
what is the cost of debt after tax? what is the cost of PS what is the cost of common stock? what is the weight of the bond what is the weight of the stock what is the weight of preferred stock what is the 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
Problem 1PS
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what is the cost of debt after tax? what is the cost of PS what is the cost of common stock? what is the weight of the bond what is the weight of the stock what is the weight of preferred stock what is the WACC?
Transcribed Image Text:The BEAR Company has 1,500 bonds
outstanding that have a market price
of $990 each. floatation cost is 0.02
the bond pays coupon of 0.065
semiannually for 24 years. The
company also has 5,000 shares of
preferred stock at a market price of
$36 and dividends 0.7 each. The
common stock is priced at $28 a share
it is undervalued by $2 and there are
36,000 shares outstanding, the stock
is expected to pay $1 and will continue
to grow at a rate Of 0.07
TAXES ARE 0.25
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