Cost of Preferred Stock Assignment

  • by

Cost of Preferred Stock Assignment

Wilson pharmaceutical is planning a 100 million for development of a new cancer drug. the development will be financed with a combination of debt preferred equity and common equity. the firms current capitol structure which considers to be optimal consists pf 30% debt 20% preferred equity and 50% common equity. the firm can issue bond with a cost of 12% before tax. the investment banker expects to sell the issue at its $100 par value per stock with a $14 annual dividend and will charge a 5% commission fee. Wilson expects to use any common equity needed to finalize the expansion through issuing new common stock to the public. Wilson expects the net proceeds from the sale of the common stock to be $30 per share the firm currently pay a dividend of $3.50 per share and expects its earnings and dividends to grow 10% annual rate for the future the firms marginal tax rate is 40%
a. calculate Wilsons cost of preferred stock
b. cost of external equity
c. calculate wacc. Get Finance homework help today
TOP ACADEMIC WRITER
He has decades of experience in the education field and has served in the examination boards of some of the top Universities within & outside the United States America.

Related

Cost of Preferred Stock Assignment

 

Homework Nerds have been helping students since 2006. Contact us today, and let us take care of all your academic needs. At Homework Nerds, we can take care of your academic needs. We can write your papers, do your presentations, learning team assignments, Labs, discussion questions and final exams. We also offer an entire week and entire class plans where we login to your classroom and take care of all class activities for you.

Homework Nerds: The #1 Most trusted academic services website.

CLICK HERE TO ORDER NOW – ORIGINAL CONTENT FROM SCRATCH 

OR 

.

 

Cost of Preferred Stock Assignment

Wilson pharmaceutical is planning a 100 million for development of a new cancer drug. the development will be financed with a combination of debt preferred equity and common equity. the firms current capitol structure which considers to be optimal consists pf 30% debt 20% preferred equity and 50% common equity. the firm can issue bond with a cost of 12% before tax. the investment banker expects to sell the issue at its $100 par value per stock with a $14 annual dividend and will charge a 5% commission fee. Wilson expects to use any common equity needed to finalize the expansion through issuing new common stock to the public. Wilson expects the net proceeds from the sale of the common stock to be $30 per share the firm currently pay a dividend of $3.50 per share and expects its earnings and dividends to grow 10% annual rate for the future the firms marginal tax rate is 40%
a. calculate Wilsons cost of preferred stock
b. cost of external equity
c. calculate wacc. Get Finance homework help today
TOP ACADEMIC WRITER
He has decades of experience in the education field and has served in the examination boards of some of the top Universities within & outside the United States America.

Related

Cost of Preferred Stock Assignment