Finance

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?

  1. 👍 0
  2. 👎 0
  3. 👁 75
asked by Cyn

Respond to this Question

First Name

Your Response

Similar Questions

  1. Business Math

    1,500 personal loan, bank is going to charge a fee of 2% of loan amount as well as take out the interest upfront. The bank is offering 15% APR for six months. Calculate the effective interest rate.

    asked by Anonymous on November 26, 2011
  2. finance

    A small chemicalcompany is negotiatimg a loan from Manhatten Bank and Trust. The small chemical company needs to borrow $500,000. The bank offers a rate of 8 1/4 % with a 20% compensating balance, or as an alternative 9 3/4% with

    asked by vanessa on October 15, 2010
  3. math

    Megan took out a loan for 1500.00. The bank is going to charge her a fee of2% of her loan amount as well as take out the interest upfront. The bank is offering her 15% APR for six months. Calculate the effective interest rate.

    asked by Anonymous on October 30, 2011
  4. math

    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,

    asked by rennie on June 4, 2013
  5. 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,

    asked by rennie on June 4, 2013
  6. 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

    asked by Bryan on January 10, 2011
  7. finance

    The banks offers a rate of 8 1/4 percent with a 20percentcompensating balance requirement, or as an alternative, 9 3/4 percent with additional fees of 5,500 to cover services the bank is providing. In either case the rate on the

    asked by butterfly on November 21, 2010
  8. Finance

    midland chemcial is negotating a loan from manhattan bank and trust. the small chemical company needs to borrow 500,000. the bank offers a rate of 81/4 percent with a 20 percent compensating balance requirement, or as an

    asked by Jane on May 1, 2011
  9. Foundations of Financial Management

    here is the problem The small chemical company needs to borrow $500,000. The bank offers a rate of 8 1/4 percent with a 20 percent compensating balance requirement, or as an alternative, 9 3/4 percent with additional fees of

    asked by scooby9132002 on August 21, 2009
  10. Math

    Mr. Nielson wants to borrow $1,000 for 2 years. He is given the choice of i) simple interest at 12%, or ii) a loan at 10% compounded monthly. Which loan results in less interest due ? b) What interest rate compounded quarterly

    asked by Nieda on September 15, 2011
  11. FIN

    After 12 months of making extra payments, what will be the loan balance? After 12 months of making the regular payment and investing the $50, what will be the loan balance? Under the regular payment and investing option, excluding

    asked by HELP on August 26, 2007

More Similar Questions