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Budgot Wings Airinos is considering upgrading its fleet of aiteraft as i expands from a regkenal uithe ta one etioring senien lo a more nationwide

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Budgot Wings Airinos is considering upgrading its fleet of aiteraft as i expands from a regkenal uithe ta one etioring senien lo a more nationwide portblio of cities and airports lo support of this process, the CFO has askod you to dotermine the applopriate weighted average cost of capitat (WhCC) to use in the discounted cash flow analynis Yee apend ihe motning gathering the following information - Budqot Wings has debt outstanding with a market value of 5160 million. This debt is in the focm of honds that are currensy priced at 5946.33 per 51 . 000 face value aed pay a coupon of 3.45%. The cuerent yield to maturty (YTM) on these bonds is 411% Budget Wings stock is cuntensy priced at $5361 per share. You expect chat nent year s ovidend wal be 53 . 19 and you expect 6 iddends to grow at 5% The current macket value of Budget Whags common equify ls 5230 millioe. Budge4 Whine pays corporate taxns at a rakt of 35% A. 8064 B. 8.35% Budgot Wings Airinos is considering upgrading its fleet of aiteraft as i expands from a regkenal uithe ta one etioring senien lo a more nationwide portblio of cities and airports lo support of this process, the CFO has askod you to dotermine the applopriate weighted average cost of capitat (WhCC) to use in the discounted cash flow analynis Yee apend ihe motning gathering the following information - Budqot Wings has debt outstanding with a market value of 5160 million. This debt is in the focm of honds that are currensy priced at 5946.33 per 51 . 000 face value aed pay a coupon of 3.45%. The cuerent yield to maturty (YTM) on these bonds is 411% Budget Wings stock is cuntensy priced at $5361 per share. You expect chat nent year s ovidend wal be 53 . 19 and you expect 6 iddends to grow at 5% The current macket value of Budget Whags common equify ls 5230 millioe. Budge4 Whine pays corporate taxns at a rakt of 35% A. 8064 B. 8.35%

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