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Question 11 pts   A company’s preferred stock is currently priced…

Question 11 pts

 

A company’s preferred stock is currently priced at $13.00 per share.  The company’s dividend is $.75.  Compute the cost of the company’s preferred stock.

Group of answer choices

7.56%

 

6.87%

 

5.77%

 

10.77%

 

 

Flag question: Question 2Question 21 pts

 

A company’s preferred stock is currently priced at $19.00 per share.  The company’s dividend is $1.65.  Compute the cost of the company’s preferred stock.

Group of answer choices

13.68%

 

8.68%

 

11.68%

 

10.00%

 

 

Flag question: Question 3Question 31 pts

 

A company’s common stock is currently priced at $11.00 per share.  The company’s dividend is $1.50.  Investors expect the company to grow at an annual rate of 3.0%.  Compute the cost of the company’s common stock.

Group of answer choices

11.00%

 

13.64%

 

16.64%

 

12.51%

 

 

Flag question: Question 4Question 41 pts

 

A company’s common stock is currently priced at $33.00 per share.  The company’s dividend is $2.50.  Investors expect the company to grow at an annual rate of 5.0%.  Compute the cost of the company’s common stock.

Group of answer choices

9.23%

 

$12.58%

 

7.58%

 

11.65%

 

 

Flag question: Question 5Question 51 pts

 

A company has the following capital structure:  $10 million from bonds, $25 million from preferred stock, and $150 million from common stock.  The cost of each source of funding is as follows:  Bonds = 7.00%; Common = 8.75%; Preferred = 5.50%.  Compute the company’s WACC.

Group of answer choices

8.75%

 

7.09%

 

8.22%

 

0.38%

 

 

Flag question: Question 6Question 61 pts

 

A bond has a coupon rate of 8.0%.  The bond expires in 10 years.  The yield on the bond is 7.0%.  The company’s tax rate is 35.0%.  Calculate the company’s current cost of debt (the cost of the bond).

Group of answer choices

5.20%

 

4.55%

 

7.00%

 

35.00%

 

 

Flag question: Question 7Question 71 pts

 

A company’s common stock is currently priced at $10.00 per share.  The company’s dividend is $1.00.  Investors expect the company to grow at an annual rate of 3.0%.  Compute the cost of the company’s common stock.

Group of answer choices

17.0%

 

10.0%

 

1.0%

 

13.0%

 

Question 10

A company has the following capital structure:  $5 million from bonds, $25 million from preferred stock, and $100 million from common stock.  The cost of each source of funding is as follows:  Bonds = 6.00%; Common = 10.75%; Preferred = 7.50%.  Compute the company’s WACC.

Group of answer choices

9.94%

 

8.27%

 

7.50%

 

10.75%

 

 

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