Filer Manufacturing has 5,336,582 shares of common stock outstanding. The current share price is $27.73, and...

Filer Manufacturing has 5,336,582 shares of common stock outstanding. The current share price is $27.73, and the book value per share is $8.17. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $58,377,375, has a 0.05 coupon, matures in 10 years and sells for 83 percent of par. The second issue has a face value of $77,610,198, has a 0.06 coupon, matures in 20 years, and sells for 92 percent of par.

The most recent dividend was $1.69 and the dividend growth rate is 0.05. Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 0.38.

What is Filer's aftertax cost of debt? Enter the answer with 4 decimals

Expert Solution

jeff jeffy answered 5 months ago

Filer Manufacturing has 4100000 shares of common stock outstanding. The current share price is $55.99, and...

Filer Manufacturing has 4100000 shares of common stock outstanding. The current share price is $55.99, and the book value per share is $5.70. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $70000000, has a 0.05 coupon, matures in 10 years and sells for 83 percent of par. The second issue has a face value of $65000000, has a 0.06 coupon, matures in 20 years, and sells for 92 percent of par....

Filer Manufacturing has 7,034,720 shares of common stock outstanding. The current share price is $65.32, and...

Filer Manufacturing has 7,034,720 shares of common stock outstanding. The current share price is $65.32, and the book value per share is $3.05. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $79,113,079, has a 0.07 coupon, matures in 12 years and sells for 81 percent of par. The second issue has a face value of $62,515,482, has a 0.08 coupon, matures in 9 years, and sells for 84 percent of par....

Filer Manufacturing has 4500000 shares of common stock outstanding. The current share price is $69.11, and...

Filer Manufacturing has 4500000 shares of common stock outstanding. The current share price is $69.11, and the book value per share is $9.62. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $53000000, has a 0.05 coupon, matures in 10 years and sells for 83 percent of par. The second issue has a face value of $58000000, has a 0.06 coupon, matures in 20 years, and sells for 92 percent of par....

Filer Manufacturing has 9000000 shares of common stock outstanding. The current share price is $24.47, and...

Filer Manufacturing has 9000000 shares of common stock outstanding. The current share price is $24.47, and the book value per share is $4.76. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $50000000, has a 0.05 coupon, matures in 10 years and sells for 83 percent of par. The second issue has a face value of $73000000, has a 0.06 coupon, matures in 20 years, and sells for 92 percent of par....

Filer Manufacturing has 5200000 shares of common stock outstanding. The current share price is $34.62, and...

Filer Manufacturing has 5200000 shares of common stock outstanding. The current share price is $34.62, and the book value per share is $9.96. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $57000000, has a 0.05 coupon, matures in 10 years and sells for 83 percent of par. The second issue has a face value of $61000000, has a 0.06 coupon, matures in 20 years, and sells for 92 percent of par....

Filer Manufacturing has 5,090,729 shares of common stock outstanding. The current share price is $34.05, and...

Filer Manufacturing has 5,090,729 shares of common stock outstanding. The current share price is $34.05, and the book value per share is $5.1. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $40,617,370, has a 0.05 coupon, matures in 10 years and sells for 83 percent of par. The second issue has a face value of $62,370,359, has a 0.06 coupon, matures in 20 years, and sells for 92 percent of par....

Filer Manufacturing has 9,781,556 shares of common stock outstanding. The current share price is $42.39, and...

Filer Manufacturing has 9,781,556 shares of common stock outstanding. The current share price is $42.39, and the book value per share is $9.09. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $58,819,081, has a 0.05 coupon, matures in 10 years and sells for 83 percent of par. The second issue has a face value of $75,900,893, has a 0.06 coupon, matures in 20 years, and sells for 92 percent of par....

Filer Manufacturing has 7267875 shares of common stock outstanding. The current share price is $32.39, and...

Filer Manufacturing has 7267875 shares of common stock outstanding. The current share price is $32.39, and the book value per share is $7.24. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $47531801, has a 0.05 coupon, matures in 10 years and sells for 83 percent of par. The second issue has a face value of $59428034, has a 0.06 coupon, matures in 20 years, and sells for 92 percent of par....

Filer Manufacturing has 8598242 shares of common stock outstanding. The current share price is $22.72, and...

Filer Manufacturing has 8598242 shares of common stock outstanding. The current share price is $22.72, and the book value per share is $7.24. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $58911674, has a 0.05 coupon, matures in 10 years and sells for 83 percent of par. The second issue has a face value of $53842405, has a 0.06 coupon, matures in 20 years, and sells for 92 percent of par....

Filer Manufacturing has 4,793,350 shares of common stock outstanding. The current share price is $55.99, and...

Filer Manufacturing has 4,793,350 shares of common stock outstanding. The current share price is $55.99, and the book value per share is $8.27. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $77,208,537, has a 0.05 coupon, matures in 10 years and sells for 83 percent of par. The second issue has a face value of $65,474,675, has a 0.06 coupon, matures in 20 years, and sells for 92 percent of par....

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