Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. filer manufacturing has 4,935,162 shares of common

Filer Manufacturing has 4,935,162 shares of common stock outstanding. The current share price is $57.69,...

90.2K

Verified Solution

Question

Finance

Filer Manufacturing has 4,935,162 shares of common stock outstanding. The current share price is $57.69, and the book value per share is $3.32. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $56,036,647, has a 0.05 coupon, matures in 10 years and sells for 83 percent of par. The second issue has a face value of $43,444,163, has a 0.06 coupon, matures in 20 years, and sells for 92 percent of par.

The most recent dividend was $1.03 and the dividend growth rate is 0.04. Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 0.36.

What is Filer's aftertax cost of debt? Enter the answer with 4 decimals (e.g. 0.2345)

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Finance
1.2K views

To solve the bid price problem presented in the text, we set the project NPV equal...

Finance
1.2K views

A Treasury bill purchased in December 2016 has 115 days until maturity and a bank discount...

Statistics
1.2K views

How would you use Describing Data: Numerical Measures in your daily routine?

Psychology
1.2K views

Are revolutions futile? Are the odds stacked against revolutionaries? Do they cause more harm than good?...

Biology
1.2K views

In mammals, the determining factor in sexual development of the external genitalia is the presence...

Biology
1.2K views

an example of phagocytosis clathrin coated pit formation Oregulated secretion constitutive secretion epithel Lysosome Endosome...

Physics
1.2K views

4 1 6 133 The focal length of a biconvex lens is 20 cm Duand...

Basic Math
1.2K views

2The area of a rectangle is 21 ft, and the length of the rectangle is...

Algebra
1.2K views

Problem 2 a Problem 2 b Hint Use the colon operator to produce the vector...

Accounting
1.2K views

Question 1(11 marks) Why are the concepts of residents and sources important? In what circumstances...

Accounting
1.2K views

there are three different problems Problem 9.12...

Accounting
1.2K views

When a partnership purchases interest of a retiring partner at more than book value, there...