'Ebon Hawk Plc.' is going to make a new investment and in order to evaluate...
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'Ebon Hawk Plc.' is going to make a new investment and in order to evaluate the project it analysis the cost of capital of the firm. We have the following information: - The capital structure consists of common shares, bank loan and bonds. - Regarding the common shares we know, that the number of shares is 41000 and their market price is $1040, the dividend paid after shares is $139.36 per share. There is no growth expectation in the dividend payments and the firm uses the Gordon-model for share valuation. - The market value of bonds (all the bonds together) is $37842000. The yield to maturity of bonds is 10.1 %. - The interest charged on bank loan is annual 16 %. - The tax rate is 28 % - The total market value of the firm's capital is $96663288. What is the after-tax cost of common shares? (Give the answer in number format with 4 decimals. E.g.: give 12.42% as 0.1242) Answer: What is the axter-tax cost of bank loans? (Give the answer in number format with 4 decimals. E.g.: give 12.42% as 0.1242) Answer: What is the axter-tax cost of bonds? (Give the answer in number format with 4 decimals. E.g.: give 12.42% as 0.1242) Answer: What is the weighted average cost of capital? (Give the answer in number format with 4 decimals. Eg.: give 12.42% as 0.1242)
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