A last year wilderness adventures paid an annual dividend, Ask an Expert

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A. Last year, Wilderness Adventures paid an annual dividend of $2.30 per share. The firm recently announced that it will increase its dividend by a constant 5.5 percent annually. What is one share of this stock worth today at a required rate of 15.0 percent?

B. The 12.50 percent preferred stock of Ajax Unlimited is selling for $93.10 a share. What is the cost of preferred stock if the risk-free rate is 4.35 percent?

C. Marvin’s Interiors issued 9-year bonds 2 years ago. The bonds have a face value of $2,000, a 9.0 percent, semiannual coupon, and a current market price of $1,489. What is the pre-tax cost of debt?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92885987

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