A Dani Corp Has 6 4 Million Shares Of Common Stock Outstanding 200 000 Shares Of 3 8 Percent Preferred Stock Outstandin 1 (42.62 KiB) Viewed 72 times
A Dani Corp Has 6 4 Million Shares Of Common Stock Outstanding 200 000 Shares Of 3 8 Percent Preferred Stock Outstandin 2 (94.95 KiB) Viewed 72 times
A Dani Corp Has 6 4 Million Shares Of Common Stock Outstanding 200 000 Shares Of 3 8 Percent Preferred Stock Outstandin 3 (95.04 KiB) Viewed 72 times
a Dani Corp has 6.4 million shares of common stock outstanding, 200,000 shares of 3.8 percent preferred stock outstanding, par value of $100, and 120,000 bonds outstanding with a semiannual coupon of 4.8 percent, par value $1,000 each. The common stock currently sells for $54 per share and has a beta of 1.08, the preferred stock currently sells for $103 per share, and the bonds have 15 years to maturity and sell for 107 percent of par. The market risk premium is 7.5 percent, Treasury-bills are yielding 2.4 percent, and the company's tax rate is 22 percent. 1) What is the firm's market value capital structure? 2) If the company is evaluating a new investment project that has the same level of risk as the firm's current business, what interest rate should the firm use to discount the project's cash flows?
Cost of Capital Input Area: Debt Bonds outstanding Years to maturity Annual coupon rate Coupons per year Bond price (% of par) Par value ($) Common stock Shares outstanding Beta Share price Preferred stok Shares outstanding Coupon rate Par value Share price Market Market risk premium Risk-free rate Tax rate
1) Market value of debt Market value of equity Market value of preferred Market value of firm DN EN PN 2) Pretax cost of debt Aftertax cost of debt Cost of equity Cost of preferred WACC
Join a community of subject matter experts. Register for FREE to view solutions, replies, and use search function. Request answer by replying!