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In: Finance
Aaron's Rentals has 58,000 shares of common stock outstanding at a market price of $36 a...
Aaron's Rentals has 58,000 shares of common stock outstanding at a market price of $36 a share. The common stock just paid a $1.64 annual dividend and has a dividend growth rate of 2.8 percent. There are 12,000 shares of 6 percent preferred stock outstanding at a market price of $51 a share. The preferred stock has a par value of $100. The outstanding bonds mature in 17 years, have a total face (book) value of $750,000, a face value per bond of $1,000, and a market price of $1,011 each. The bonds pay 8 percent interest, semiannually. The tax rate is 34 percent. What is the firm's weighted average cost of capital?
Solutions
jeff jeffy answered 2 years agoRelated Solutions
Aaron's Rentals has 58,000 shares of common stock outstanding at a market price of $36 a...
Aaron's Rentals has 58,000 shares of common stock outstanding at
a market price of $36 a share. The common stock just paid a $1.64
annual dividend and has a dividend growth rate of 2.8 percent.
There are 12,000 shares of 6 percent preferred stock outstanding at
a market price of $51 a share. The preferred stock has a par value
of $100. The outstanding bonds mature in 17 years, have a total
face value of $750,000, a face value per...
National Rentals has $59,000 shares of common stock outstanding at a market price of $36.00 a...
National Rentals has $59,000 shares of common stock outstanding
at a market price of $36.00 a share. The common stock just paid a
$1.64 annual dividend and has a dividend growth rate 0f 2.8%. There
are 12,000 shares of 6% preferred stock outstanding at a market
price of $ 51.00 a share. The preferred stock has a par value of
$100. The outstanding bonds mature in 17 years, have a total face
value of $750,000, a face value per bond...
Jake's Sound Systems has 210,000 shares of common stock outstanding at a market price of $36...
Jake's Sound Systems has 210,000 shares of common stock
outstanding at a market price of $36 a share. Last month, Jake's
paid an annual dividend in the amount of $1.593 per share. The
dividend growth rate is 4%. Jake's also has 6,000 bonds outstanding
with a face value of $1,000 per bond. The bonds carry a 7% coupon,
pay interest annually, and mature in 4.89 years. The bonds are
selling at 99% of face value. The company's tax rate is...
Jake's Sound Systems has 210,000 shares of common stock outstanding at a market price of $36...
Jake's Sound Systems has 210,000 shares of common stock
outstanding at a market price of $36 a share. Last month, Jake's
paid an annual dividend in the amount of $1.593 per share. The
dividend growth rate is 4%. Jake's also has 6,000 bonds outstanding
with a face value of $1,000 per bond. The bonds carry a 7% coupon,
pay interest annually, and mature in 4.89 years. The bonds are
selling at 99% of face value. The company's tax rate is...
1) A compant has 50,000 shares of common stock outstanding at a market price of $20...
1) A compant has 50,000 shares of common stock outstanding at a
market price of $20 a share. The common stock just paid a $1 annual
dividend and has a divided growth rate of 5 percent. What is the
total market value of common stock? What is the cost of equity
(common stock)?
2) There are 12,000 shares of 6 percent preferred stock outstanding
at a market price of $51 a share. What is the total market value of
preferred...
Prudential Transportation has 600,000 shares of common stock outstanding at a market price of $25 a...
Prudential Transportation has 600,000 shares of common stock
outstanding at a market price of $25 a share. Last month,
Prudential Transportation paid an annual dividend in the amount of
$1.00 per share. The dividend growth rate is 5%. Prudential
Transportation also has 21,000 bonds outstanding with a face value
of $1,000 per bond. The bonds carry a 5% coupon, pay interest
annually, and mature in 10 years. The bonds are selling at 104% of
face value. The company's tax rate...
Texas Instruments has 500,000 shares of common stock outstanding at a market price of $54 a...
Texas Instruments has 500,000 shares of common stock outstanding
at a market price of $54 a share. Last month, Texas Instruments
paid an annual dividend in the amount of $2.80 per share. The
dividend growth rate is 5%. Texas Instruments also has 20,000 bonds
outstanding with a face value of $1,000 per bond. The bonds carry a
5% coupon, pay interest annually, and mature in 15 years. The bonds
are selling at 104% of face value. The company's tax rate...
XYZ Corporation has 200 shares of common stock outstanding at a market price of £37 a...
XYZ Corporation has 200 shares of common stock outstanding at a
market price of £37 a share. Suppose the firm common stock has a
beta of 1.37, the risk free rate is 3.4 per cent, and the market
risk premium is 8.2 per cent. The firm also has 5 bonds outstanding
with a face value of £1,000 per bond that are selling at 99 per
cent of par. The bonds have a coupon rate of 6 per cent and a...
A firm has 5,000,000 shares of common stock outstanding, each with a market price of $10.00...
A firm has 5,000,000 shares of common stock outstanding, each
with a market price of $10.00 per share. It has 55,000 bonds
outstanding, each selling for $990 with a $1,000 face value. The
bonds mature in 15 years, have a coupon rate of 8 percent, and pay
coupons semiannually. The firm's equity has a beta of 2.0, and the
expected market return is 15 percent. The tax rate is 21 percent
and the WACC is 16 percent. Calculate the risk-free...
Sound Systems has 200 shares of common stock outstanding at a market price of $37 a...
Sound Systems has 200 shares of common stock outstanding at a
market price of $37 a share. The firm recently paid an annual
dividend in the amount of $1.20 per share and has a dividend growth
rate of 4 percent. The firm also has 5 bonds outstanding with a
face value of $1,000 per bond that are selling at 99 percent of
par. The bonds have a coupon rate of 6 percent and a yield to
maturity of 6.7 percent....
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