MyFinanceLab Ch. 14

MyFinanceLab Ch. 14 - Multiply that answer by 2 to get...

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MyFinanceLab: Ch. 14 Weights: o Wd: Book values of debt/ market value total capital o We: Market value of equity/ market value total capital Cost of debt: o Debt issued w/ $1000 par value, 8.0% coupon rate (interest paid semiannually), maturing in 20 years can be sold today for $1100: =RATE (40, 40, -1100, 1000)
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Unformatted text preview: Multiply that answer by 2 to get annual rate Cost of preferred equity: o Div. per sh./ price per sh. Cost of common equity: o DDM: =((D0(1+g))/Pe) + g =(D1/ Pe) + g o CAPM: Flotation cost adjusted initial outlay: o Financing needed/ (1 flotation cost %)...
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This note was uploaded on 06/11/2011 for the course BUSI 408 taught by Professor Croce during the Spring '08 term at UNC.

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