finance hw
dgurk172w
copy_of_phase_4_ip_template.xlsxPhase 4 IP Template
| Phase 4 IP Template | |||||
| Step 1 | |||||
| Company | Total Assets | Total Liabilities | Total Preferred Stock | Total Common Equity | |
| Company A | |||||
| (in XXXs) Computer: i.e mil, 000s etc |
|||||
| % of Assets | |||||
| Check - B10 Should Equal 100% | |||||
| 0.0% | |||||
| Company | Income before Tax | Income Tax Expense | Average Tax Rate | ||
| Company A | |||||
| (in XXXs) Computer: i.e mil, 000s etc |
|||||
| Step 2 | |||||
| Yield to Maturity | 1 - Average Tax Rate | After-tax Cost of Debt | |||
| Step 3 | |||||
| Annual Dividend | Current Value of Preferred Stock | Cost of Preferred Stock (%) | |||
| Note: Assume $5 per share to issue preferred stock | |||||
| Step 4 | |||||
| 5-year Treasury Bond Yield (risk-free rate) | Stock's Beta | Return on the Top 500 Stocks (market return) | Cost of Common Equity | ||
| Step 5 | |||||
| After-Tax Cost of Debt | Cost of Preferred Stock | Cost of Common Equity | WACC | ||
| Unweighted Cost | Check F39 = 100% | ||||
| Weight of Component | 0.0% | ||||
| Weighted Cost of Component |
