D21567ABfxCDEFGH8Price per share9Shares outstanding8,000,00022.00Face value of outstanding bond issue $ 40,000,00010Coupon rate on bonds10%11Maturity of bonds1712Price of bonds (% of par)94.0013Weighted-average tax rate34.00%14Next expected dividend3.0015Expected dividend growth rate5.00%16171819Complete the following analysis. Do not hard code values in your calculations.2021Before-tax cost of equity22Before-tax cost of debt232425Equity weightDebt weightWACC2627

Before-tax cost of equity18.64%Before-tax cost of debt7.55%Equity weight82.40%Debt…

Answered: D21 5 6 7 A B fx C D E F G H 8 Price…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

number of outstanding shares100 000Earnings300 000Retention ratio60%91-day Treasury bill rate6%Market risk premium8%UFSK Beta1.2Dividend growth rate stable phase5%Bonds outstanding5 000Par value per bond1000Semi-annual coupon rate on bonds6%Bond yield to maturity8%Bond years remaining to maturity4Corporate tax rate30%Additional informationUFSK limited recently paid a dividendUFSK recently signed a deal and expects a super normal growth in earnings. The company expects earnings to grow by 8% for the first two years then decline by 2% in the following year, there after a stable growth of 5% is expected into the future.Required:. Determine the fair value of UFSK limited bond
number of outstanding shares100 000Earnings300 000Retention ratio60%91-day Treasury bill rate6%Market risk premium8%UFSK Beta1.2Dividend growth rate stable phase5%Bonds outstanding5 000Par value per bond1000Semi-annual coupon rate on bonds6%Bond yield to maturity8%Bond years remaining to maturity4Corporate tax rate30%Additional informationUFSK limited recently paid a dividendUFSK recently signed a deal and expects a super normal growth in earnings. The company expects earnings to grow by 8% for the first two years then decline by 2% in the following year, there after a stable growth of 5% is expected into the future.Required:As an investment analyst advise your client how much must she expect to pay for UFSK limited stock.
number of outstanding shares100 000Earnings300 000Retention ratio60%91-day Treasury bill rate6%Market risk premium8%UFSK Beta1.2Dividend growth rate stable phase5%Bonds outstanding5 000Par value per bond1000Semi-annual coupon rate on bonds6%Bond yield to maturity8%Bond years remaining to maturity4Corporate tax rate30%Additional informationUFSK limited recently paid a dividendUFSK recently signed a deal and expects a super normal growth in earnings. The company expects earnings to grow by 8% for the first two years then decline by 2% in the following year, there after a stable growth of 5% is expected into the future.Required:Determine the total value of the company’s debt
Stock price Shares outstanding (millions) Mkt value Debt (millions) Capitalization (book value) Debt Equity Beta Target D/E Cost of debt Market Info Risk-free rate Comparable Company 10 1,000 10,000 20.00% 80.00% 1.40 n/a 6.50% 4.00% Market Risk Premium 5.00% Company A n/a n/a n/a 25.00% 75.00% n/a 0.80 5.00% Required: Use the relevant Comparable Company and Company A to calculate the WACC for Company A Assume the tax rate for both companies is 30%.
Finance Question
Assume the following yields for different bonds issued by a corporation: One - year bond: 5.50% Two - year bond: 6.00% Three-year bond: 7.00% If an on - the - run 3-year U.S. Treasury is yielding 5 percent, then what is the relative yield spread on the 3-year corporate issue? A. 1.167 B16.67% C. 14.28% D. 100 basis
Company CouponRate MarketPrice TimeSince LastInterest AccruedInterest Commissionper Bond BondsSold TotalPrice Company 4 10.925% 77.00 85 days $ $11.00 15
Financials of X Ltd are as follows. 10% Debt 6500; Current Market Price 80.21; Equity Beta 1.25; Equity Capital (Rs 10) 1900; Market Risk Premium 6; PAT 1235; Retained Earnings 4100; Risk Free Return 7%; Tax 35%. Find market value added. a. Rs 9329.30 b. Rs 9932.90 c. Rs 9239.90 d. Rs 9329.90
What is the value of B8? A Bond Valuation 1 2 Time to Maturity (Periods) 3 Coupon Rate 4 Required Return 5 Frequency 6 Face Value 7 8 Invoice Price 9 An O$741.01 $1,000.00 O $1,008.33 $735.08 B 15 2/3 5.00% 10.00% 2 $ 1,000 ? C
EXAMPLE 10: From the following, compute Debt Equity Ratio: Equity Share Capital 1,00,000 General Reserve 80,000 6.5 % Debentures 75,000 Current Liabilities 90,000 o add notes COMMENTS OTES
Stock Price- $188.50 Dividend- (0.47) Beta- 1.21 Shares Oustanding- 1.82B Risk-Free Rate- 1.50% Market Risk Premium- 7.00% Market Value of Equity- $343.07B CAPM- 5.50% Total Market Vlaue of Bonds - $767,441 Cost of Debt- 364.049% Tax Rate- 35% Question: After Tax Cost of Debt= ?
19) You are given the following information regarding UFSK limited, a listed entity. I Number of outstanding shares 100 000 Earnings 300 000 Retention ratio 60% 91-day Treasury bill rate 6% Market risk premium 8% UFSK Beta 1.2 Dividend growth rate stable phase 5% Bonds outstanding 5 000 Par value per bond 1000 Sermi-annual coupon rate on bonds 6% Bond yleld to maturity 8% Bond years remaining to maturity 4 Сегрогate tax rate 30% Additional information • UFSK limited recently paid a dividend • UFSK recently signed a deal and expects a super normal gronth in eamings. The company expects earnings to grow by 8% for the first two years then decline by 2% in the following year, there after a stable growth of 5% is expected into the future Required a) As an investment analyst advise your client how much must she expect to pay for UFSK limited stock b) Ascertain the market value of UFSK imited equity. c) Determine the fair value of UFSK imited bond d) Determine the total value of the company's…

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