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Another Co. has a current share price of $27.50 and a total of 15 million shares outstanding. The company currently has debt with a total
Another Co. has a current share price of $27.50 and a total of 15 million shares outstanding. The company currently has debt with a total face value of $880 million. These outstanding bonds are currently priced to yield 7.9% while quoting at 95% of total face value. The company also has preferred shares outstanding. The current market value of preferred shares is $200 million. The price of the preferred shares is $46 and the dividend (which is paid in perpetuity) is $5.10 per share. The company recently paid a dividend to common stock holders of $3.25 and anticipates growing the dividend at a constant rate of 5% per year indefinitely. If the corporate tax rate is 34%, what is the WACC of this company? Select one: O a. 10.24% O b. 10.0.1% O c. 9.50% d. 8.79%
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