Calculating Cost of Preferred Stock

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• Cost of Preferred stock

  Cost of Preferred stock = Dividend / (Selling price - floatation cost) Floatation cost = 4% of 102.50 = $4.10 Cost of Preferred stock = 9.50/(102.50-4.10) Cost of Preferred stock = 9.50/98.40 = 9.65% The solution cost of preferred stock for use

• Cost of Preferred Stock

  Dividend= $9.50 Therefor, company's cost of preferred shares= 9.65% = $9.5 / $98.4 Answer : company's cost of preferred stock for use in calculating the WACC= 9.65% Cost of Preferred Stock has been calculated

• Portfolio / Cost of Capital

  If the stock sells for $34 per share, what is your best estimate of the company's cost of equity 7. Calculating Cost of Preferred Stock: Holdup Bank has an issue of preferred stock with a $5 stated dividend that just sold for $87 per share.

• Calculating WACC of Global Technology

  of common stock +cost of preferred stock* weight of preferred stock+ cost of debt*weight of debt*(1-Tax rate) Weight of debt=35%=0.35 Weight of Preferred stock=15%=0.15 Weight of common stock=50%=0.50 WACC=14.5%*0.5+10%*0.15+8%*0.35*(1-0.34)=

• Mullineaux Corporation: calculating WACC and why the company doesn't use more preferred stock financing, since it costs less than debt...

  share of common stock = 0.65 cost of stock = 15% share of preferred stock = 10% cost of preferred stock = 6% share of debt = 25% cost of debt = 7.5% tax rate = 35% Thus, WACC = 0.65 * 15% + 0.1 * 6% + 0.25 * 7.5%*(1-35%) = 11.6% Although the

• Hettenhouse Company's perpetual preferred stock : What is the company's cost of preferred stock for use in calculating the WACC?

  If the company were to sell a new preferred issue, it would incur a flotation cost of 4.00% of the price paid by investors. What is the company's cost of preferred stock for use in calculating the WACC?

• Exchange Rates and WACC problems

  Calculate the weighted average cost of capital WACC=proportion of debt x after tax cost of debt + proportion of common stock x cost of common stock + proportion of preferred stock x cost of preferred stock

• Conversion Value / WACC/ Terminal Value

  149996 A share of a venture's preferred stock is convertible into 1.5 shares of its common stock. Exercise1: A share of a venture's preferred stock is convertible into 1.5 shares of its common stock.

• Cost of Capital: calculate WACC using what capital structure?

  WACC= weighted average cost of capital = Bond * Cb + Preferred stock * Cp + Common equity * Cc = 1/3 * 5% + 1/6 * 10% + 1/2 * 14% = 1.67% + 1.67% + 7% = 10.34% The solution responds to the questions with detailed calculations.