If the market risk premium is 6.5%, the market risk-free rate and company has the following:
Common Stock: 7,500,000 shares outstanding, selling at $35 per share, beta 1.3
Preferred Stock: 200,000 shares outstanding, 5% yield, selling at $100 per share
Debt: 125,000 6% semiannual bonds outstanding, par value $1000 each with 15 years to maturity, selling at 112% of par
Tax Rate: 30%
Calculate the company`s market value.
Calculate the percentage of the market value capital structure that is debt.
Calculate the percentage of the market value capital structure that is common shares.
Calculate the percentage of the market value capital structure that is preferred shares.