You are given the following information concerning Parrothead Enterprises: Calculate the company?s WACC. Debt: 13,000 6.4 percent
Question:
You are given the following information concerning Parrothead Enterprises:
Calculate the company?s WACC.
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Debt: 13,000 6.4 percent coupon bonds outstanding, with 15 years to maturity and a quoted price of 107. These bonds pay interest semiannually. 345,000 shares of common stock selling for $76.50 Common stock: share. The stock has a beta of .90 and will pay a per dividend of $3.80 next year. The dividend is expected to grow by 5 percent per year indefinitely. Preferred stock: 10,000 shares of 4.4 percent preferred stock selling at $86 per share. 11 percent expected return, risk-free rate of 3.6 percent, and a 22 percent tax rate. Market:
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We will begin by finding the market value of each type of financing We find MV D 130001000107 139100...View the full answer
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Related Book For
Essentials of Corporate Finance
ISBN: 978-1260013955
10th edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
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