Lisa is considering and investment into the z ltd. The company has following capital structure: 5 million...

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Lisa is considering and investment into the z ltd. The companyhas following capital structure:
5 million value 12% coupon bond paying interest semi-annually.The bonds have face value of $1000 and will be mature in 13 yearsfrom now. The yield to maturity for the bond is 12.5%
40000 outstanding ordinary share which just paid a dividend of$5 per share. The recent financial statement of the companyannounced a steady growth of 8% per year in their dividend payoutpolicy. The re quired rate of return for shares of this type is16%
Required
Calculate the current value of the bond
Calculate the current value of the share
Calculate the current total market value of the firm?
Calculate the capital structure of the firm by identifyingweight of debt financing and weight of equity financing?
Compute the weighted average cost of capital (WACC) under thetraditional tax system for the firm, using dividend constant growthmodel for calculation the cost of equity.
Assume that the company decided to convert their bond to apreference share with the same face value which promises an incomeof 10% fixed dividend each year. Compute the present value of thepreference share is expected return of the same type of preferenceshare is 9%

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You have asked a very long question with multiple sub parts I will address the first four sub parts Please post the balance sub parts as a separate question Calculate the current value of the bond We will calculate the value of one bond using PV function of excel Please note that payments are on semi annual basis Hence one See Answer

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Lisa is considering and investment into the z ltd. The companyhas following capital structure:5 million value 12% coupon bond paying interest semi-annually.The bonds have face value of $1000 and will be mature in 13 yearsfrom now. The yield to maturity for the bond is 12.5%40000 outstanding ordinary share which just paid a dividend of$5 per share. The recent financial statement of the companyannounced a steady growth of 8% per year in their dividend payoutpolicy. The re quired rate of return for shares of this type is16%RequiredCalculate the current value of the bondCalculate the current value of the shareCalculate the current total market value of the firm?Calculate the capital structure of the firm by identifyingweight of debt financing and weight of equity financing?Compute the weighted average cost of capital (WACC) under thetraditional tax system for the firm, using dividend constant growthmodel for calculation the cost of equity.Assume that the company decided to convert their bond to apreference share with the same face value which promises an incomeof 10% fixed dividend each year. Compute the present value of thepreference share is expected return of the same type of preferenceshare is 9%