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CellU, the company CompU is looking at purchasing, has a target capital structure of 80% debt, 5% preferred stock, and 15% equity. CellU can raise $1.5 million in debt by issuing 12% mortgage bonds (before tax). Flotation costs for debt are 1% of the $1,000 par value. Preferred stock has a fixed 13% dividend rate. The firm can sell their preferred stock for the par value of $100 minus a 5% flotation cost. The firm paid a common stock dividend of $2.50 last year and has a constant growth rate of 8%. Flotation costs for common stock are 15% of the current stock price of $18.
The firm's current retained earnings are $300,000, and the firm's marginal tax rate is 40%.
a. What is the after-tax cost of debt?b. What is the cost of preferred stock?c. What is the cost of retained earnings?d. What is the cost of new common stock?e. What is the weighted average cost of capital using retained earnings?f. What is the weighted average cost of capital using new common stock?
Organize the transaction data in accounts under an accounting equation. Prepare the stockholders equity section of the balance sheet at December 31, 2012.
In that event, what would you expect to happen to the costs of cakes - measure of complexity is the number of tiers in the cake.
show variable costs per unit, fixed costs, and three different flexible budgets for sales volumes of 7,500, 10,000, and 12,500 units.
In this assignment, N will denote the set of positive integers, Z the set of all integers, Q the set of all rational numbers, and R the set of all real numbers. After any problem statement, feel free to hit the Enter key as often as you need to ma..
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1.Use the following information to determine this company's cash flows from financing activities.
Determine the balance in manufacturing overhead, and prepare a journal entry to close the balance to cost of goods sold.
Calculate the approximate equivalent annual percentage cost of a discount of 2%, which reduces the time taken by credit customers to pay from 70 days to 30 days.
Prepare the journal entry for Organic Growth at January 2, 2012, assuming Organic Growth estimates returns of 20% based on prior experience.
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