PS4 - PS4 Fin 332 Submit PS4 solution (as a group) at the...

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PS4 Fin 332 Submit PS4 solution (as a group) at the beginning of class on Monday, March 24 for extra credit. To receive credit you need to make a reasonable effort to solve the problems. Also, your work needs to be clear and organized. Please staple the pages together. (1) T Industries can issue perpetual preferred stock at a price of $50 a share. The issue is expected to pay a constant annual dividend of $3.80 a share. The flotation cost on the issue is estimated to be 5 percent. What is the company’s cost of preferred stock? (2) A company’s 6 percent coupon rate, semiannual payment, $1,000 par value bond which matures in 30 years sells at a price of $515.16. The company’s tax rate is 40 percent. What is the company’s after-tax cost of debt? (3) The earnings, dividends, and stock price of Carpetto Technologies are expected to grow at 7 percent per year in the future. Carpetto’s common stock sells for $23 per share, its last dividend was $2.00, and the company will pay a dividend of $2.14 at the end of
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PS4 - PS4 Fin 332 Submit PS4 solution (as a group) at the...

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