Question:
The Rogers Company is currently in this situation: (1) EBIT = $4.million; (2) tax rate, T = 35%; (3) value of debt, D = $2 million; (4) kd = 10%; (5) ks = 15%; (6) shares of stock outstanding, n0 = 600,000. the firm''s market is stable and its expect no growth,so all earnings are paid out as dividends.
The debt consists of perpetual bonds.
a. what are the total market value of the firms stock, S, its price per share, Po and the firms total market value,v?
b. what is the firms weighted average cost of capital?
Attachment:- invoice.pdf