1, JSPDI also has outstand preferred stock. If one share’s dividend is $15.0 and the required return on preferred is 13.00% versus the required…

1, JSPDI also has outstand preferred stock. If one share’s dividend is $15.0 and the required return on preferred is 13.00% versus the required return on its stock of 12.00%,and a required return on the market of 9%, At what price should JSPDI preferred stock trade?2 Cosmic Communication needs to estimate is WACC for a possible expansion. Its preferred stock presently has a price of $105.75 and pays a dividend of $12.75. For new shares, it will face a 5% floatation cost. What is the company’s cost of preferred stock for use in calculating the WACC?3 You work for Cosmic Communication and have been told to estimate the cost of common stock from retained earnings using the DCF approach. You a given the following information Next year’s dividend is expected to be $1.25 and is expected to grow at 7.5%. Today’s price $25.00. What is your answer using the DCF approach?4 Cosmic Communications is estimating the cost of debt in its WACC. It has an outstanding bond with 20 year remaining to maturity. It has a coupon of 8.25% and a yield to maturity of 7.75%; it faces a 40% effective tax rate. It were to issue a 20-year bond, what is the cost of debt for use in the WACC calculation?5 Cosmic Communication will likely need to issue new stock to fund the expansion and wants to confirm the results from question 11. Recall that its dividend is expected to growth at 7.5% and it next dividend will be $1.25. The risk free rate is 5.00%, the return required on the market of 12.00%, and its beta is 1.15%. What is the cost of existing equity using the CAPM. What is the intrinsic value based on this required return? Given this value, what is the cost of new equity if floatation costs are 15%.

Solutions to assignment of no name student – 09876 (April 16)1) JSPDID0 P0 = rp where:P0 – current selling price of preferred stockD0 – constant annual dividendrp – required rate of return on…

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