JJ firm issues preferred dividends at an annual rate of $5.97. Its current preferred stock price is $21.57. Assume that the equity beta for it is 1.03. The Vield on 10- year treasures is 3,35%, and that the market risk premium for the year is 6%. The company’s EPS expected growth is 2%. For this year, the dividends for i firmare the same for common and preferred stock; additionally the price for common stock is $32. What is the common cost of equity for Firm using the CDGM method? NOTE: Answer in percentages. That is, if your answer is 90% or 0.90, you should answer 90,00, not 0.90
At 2018 ABI Construction has a face debt value of 28.9M trading at 87% with a pre-tax welgthed cost of 6,94%. ABI common equity for the year was valued at 89.74M and preferred equity for 14,04M. The Preferred equity rate was calculated to be 7.05%. However, the common equity was to be calculated using CAPM approach, with a 3% risk free rate and a 7% market risk premium rate, assuming a 1.34 Beta. If the tax rate is 42%, What is this firm’s WACC? NOTE: Answer in percentages. That is, if your answer is 90% or 0.90, you should answer 90.00, not 0.90
Company Detox, is a private company that designs, manufactures and distributes certain consumer products, in this fiscal year, Detox had revenues of $364M and earnings of $29M. Detox company has filed a registration statement with the SEC for its IPO. If the industry averare MV/Earnings ratio and MV/Revenues ratio for the recent fiscal year were 20.19 and 0.59 respectively. Estimate the IPO price for Detox Company using the MV/Earrings ratio and assuming that they will issue 20M shares
