XYZ Company has an existing capital structure mix of Debt 30%, preferred stock 30% and Common Stock 40%. If the weighted average cost of capital is 9.10 % and the cost of debt is 5 % and the cost of preffered stock is 10 %.Find the cost of the common stock. Select one: a. 14.04 % b. None of these c. 11.50 % d. 12.25 %

XYZ Company has an existing capital structure mix of Debt 30%, preferred stock 30% and Common Stock 40%. If the weighted average cost of capital is 9.10 % and the cost of debt is 5 % and the cost of preffered stock is 10 %.Find the cost of the common stock. Select one: a. 14.04 % b. None of these c. 11.50 % d. 12.25 %

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Railsplitters, Inc. has the following information for its capital structure: Instrument: Amount Issued Current Price YTM Bond A $500 Million 100.82 4.36% Bond B $350 Million 101.36 4.49% Common Stock 42.5 Million Shares $28.21 per share E(R ) Market = 8.65% β = 1.27 Expected Dividend = $1.95 Rf = 2.10% Growth Rate = 2.75% Given this information, if the tax rate of the firm is 30%, what is the after-tax cost of debt?
Hello. I need help with the following question please. Taylor Company has a target capital structure that consists of $3.3 million of debt capital, $2.5 million of preferred stock financing, and $2.8 million of common equity. The corresponding weights of its debt, preferred stock, and common equity financing that should be used to compute its weighted cost of capital (rounded to the nearest wo decimal places) are: 38.37%, 29.07%, and 32.56%, respectively 32.04%, 34.53%, and 33.43%, respectively 29.07%, 32.56%, and 38.37%, respectively 34.53%, 33.43%, and 32.04%, respectively Consider the following case: Mason Limited, a key competitor of Taylor Company in the construction field, has a capital structure consisting of 45% debt, 5% preferred stock, and 50% common equity. Concerned that its cost of capital may put it at a competitive disadvantage vis-a-vis the Taylor Company, a Mason analyst has been tasked with computing and comparing the weighted costs…
Can you help me with B and c?
Determine Garneau's optimal capital structure based on the following information: Debt EPS DPS Stock Price 20% 2.2 1.1 40.12 30% 2.4 40% 2.6 50% 2.8 Equity 80% 70% 60% 50% O a. 20% debt; 80% equity O b. 40% debt; 60% equity O c. 50% debt; 50% equity O d. 30% debt; 70% equity 1.2 1.3 1.4 41.34 40.52 39.42
b) Calculate the cost of preferred shares for Y capital structure.
c) Calculate the cost of ordinary shares for each capital structure.
Capital structure of the ABC PJSC is as follows: Equity share capital market value $ 200 million, dividend $ 4 , market price per share $88, dividend growth 4%. Bond $ 300 million, Yield to maturity 4% , tax rate 20% Calculate weighted average cost of capital.