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The company's common stock beta is 1.05. If the risk-free rate of return is 5.3% and the expected return on the market is 12%, what is the company's cost of equity?

1) H Bank sold a preferred stock that paid dividends of $ 6 per share for $ 96 per share. | What is the capital cost of the preferred stock of this bank?

2) The company issued bonds seven years ago, with maturities of 30 years and paying 8% coupons every half year. This The bonds are currently sold at 95% of face value. The corporate tax rate is 35%.(1.) What is the pre-tax cost of debt? (2). What is the after-tax cost of debt? |(3). Which is more appropriate? Why?

3) M shares 60% of common stock, 5% of preferred stock, and 35% of liabilities as target capital structure. Equity capital cost is 14%, preferred stock cost is 6%, and debt cost is 8%. The tax rate is 35%. a. What is the WACC of M company? b. The president of the company asked you if you did not choose a capital structure that would increase the proportion of preferentialism because the preferential costs are cheaper. What would you say to the company president?

4) the company's weighted average cost of capital (WACC) is 8.9%, cost of equity is 12% and pre-tax cost of debt is 7.9%. The tax rate is 35%. What is the target D / E ratio of the company?

5) The company holds a target D / E ratio of 1.05. The company's WACC is 9.4% and the tax rate is 35%. a. If the company's cost of equity is 14%, what is the pre-tax cost of debt? b. If the after-tax cost of debt is 6.8%, what is the company's cost of equity?

Financial Management, Finance

  • Category:- Financial Management
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