Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. hankins corporation has 5.2 million shares of comm

Hankins Corporation has 5.2 million shares of common stock outstanding, 296,000 shares of 5.25 percent...

90.2K

Verified Solution

Question

Finance

Hankins Corporation has 5.2 million shares of common stock outstanding, 296,000 shares of 5.25 percent preferred stock outstanding, par value of $100, and 140,000 5.6 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $72.45 per share and has a beta of 1.08, the preferred stock currently sells for $103.60 per share, and the bonds have 23 years to maturity and sell for 103.1 percent of par. The market risk premium is 6.4 percent, T-bills are yielding 2.9 percent, and the firms tax rate is 23 percent.(Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) 1.

What is the firm's market value capital structure?

Market value weight of debt?

Market value weight of preferred stock?

Market value weight of equity?

2.

What is the firm's cost of each form of financing?

Aftertax cost of debt. % ?

Cost of preferred stock. % ?

Cost of equity. % ?

3.

If the firm is evaluating a new investment project that has the same risk as the firms typical project, what rate should the firm use to discount the projects cash flows?

Weighted average cost of capital ?

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