Question
Beyond Strawberry, Inc. shares have 942 million ordinary (common) stock outstanding and is trading at a price of $74 per share. Additionally, Beyond Strawberry's common
Beyond Strawberry, Inc. shares have 942 million ordinary (common) stock outstanding and is trading at a price of $74 per share. Additionally, Beyond Strawberry's common stock has a beta of 1.5, the yield on treasury bills is 3% and the expected market return is 13%. The company also has 1 million preferred stock outstanding, each worth $15.00 per share. The preferred stock currently pays a dividend of $4.00 per share and this is expected to continue indefinitely. Further, Beyond Strawberry has $1 Billion of bonds outstanding but these trade at 95% of their par value. When the bonds were issued, they were sold at par, promised to pay semi-annual coupons, and had an annual coupon rate of 5%. If the corporate tax rate is 21%, determine the WACC for Beyond Strawberry Inc.
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