ADMS 3530 Chapter Notes - Chapter 13: Capital Asset Pricing Model, Tax Bracket, Eastman Chemical Company

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13 wacc - solutions: a company just paid a . 00 per share dividend on its common stock (div0. The dividend is expected to grow at a constant rate of 7 percent per year. The stock currently sells for a share. What is the common equity"s cost of capital: 5. 10, 11. 76, 11. 98, 12. 10% What is the firm"s component cost of debt for purposes of calculating the wacc: 6. 11, 7. 33, 7. 56, 12. 22% Inputs: n = 40; pv = -686. 86; pmt = 40; fv = 1000. Ytm = 12. 22% rd after-tax = 12. 22 x (1 - t) = 12. 22 x (1 - 0. 4) = 7. 33: halley industries" preferred stock pays an annual dividend of per share. When issued, the shares sold for their par value of per share. What is the cost of preferred stock if the current price is per share: 3. 00, 3. 53, 4. 00, 4. 70%

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