Finance Problems Answers

timer Asked: Jul 8th, 2015

Question description

The common stock is currently selling for $15 a share, pays a cash dividend of $ 0.75 per share, and is growing annually at 6%, The preferred stock pays a $9 cash dividend and currently sells for $91 a share. The Debt pays interest of 8.5% annually, and the firm is in the 30% marginal tax bracket.

a.What is the after-tax cost of debt?

b.What is the cost of preferred stock?

c.What is the cost of common stock?

d.What is the firm's weighted-average cost of capital?

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