posted by .

If our company's bank loan has a 12 interest rate, what is our effective, after-tax interest cost? Assume the tax rate = 38%

If our preferred stock is paying a contractual $1.85 annual dividend and has current market price of $13.50, what is our cost of preferred stock?

A company pays a common stock dividend of $1.96. The stock's current price is 447.50 per share. Compute the cost of common equity.

The return on long-term US government securities (30 year Treasuries) = 5.25%. The projected 15-year average return of S&P 500 stocks is 6.05%. The stock we wish to invest in has a "beta" of 1.065. What does the CAPM formula say our cost of equity is? How risky is this stock as an investment?

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. finance

    If our company's bank loan has a 12 interest rate, what is our effective, after-tax interest cost?
  2. finance (bonds to stock)

    corporations prefer bonds to preferred stock for financing their operations because?
  3. Finance

    Calculate die after-tax cost of debt under each of the following conditions: a. Interest rate of 13%, tax rate of 0% b. Interest rate of 13%, tax rate of 20% c. Interest rate of 13%, tax rate of 35%
  4. Business finance

    In a discount interest loan, you pay the interest payment up front. For example, if a 1-year loan is stated as $10,000 and the interest rate is 10 percent, the borrower “pays” 0.10 x $10,000 = $1,000 immediately, thereby receiving …
  5. finance

    1. A bond has a $1,000 par value (face value) and a contract or coupon interior rate of 8%. A new issue would have a flotation cost of 5% of the market value. The bonds mature in 10 years. The firm’s average tax rate is 28% and its …
  6. math

    Big Sky Mining Company must install $1.5 million of new machinery in its Nevada mine. It can obtain a bak loan for 100% of the purchase price, or it can lease the machinery. Assume the following facts apply: a) The machinery fall s …
  7. umdnj

    A company has preferred stock that can be sold for $21 per share. The preferred stock pays an annual dividend of 3.5% based on a par value of $100. Flotation costs associated with the sale of preferred stock equal $1.25 per share. …
  8. fin 3030

    2. A new common stock issue paid a $1.50 dividend last year. The par value of the stock is $25, and earnings per share have grown at a rate of 3% per year. This growth rate is expected to continue into the foreseeable future. The company …
  9. Finance Accounting

    One of the advantages of borrowing is that interest is deductible for income tax purposes. a. If a company pays 8 percent interest to borrow $500,000, but is in an income tax bracket that requires it to pay 40 percent income tax, what …
  10. math

    Compute the hurdle rate above based on the following.1. Note payable bank $2,000,000.00 with rate of 7.5%, The company has a tax rate of 30%.2. Bank Mortgage Loan $1,000,000.00 with rate of 6% The company has a tax rate of 30%.3. Preferred …

More Similar Questions