Calculating the WACC You are given the following information concerning Parrothead Enterprises:

Debt: $,15,0005\mathrm{.}9$ percent coupon bonds outstanding, with $17$ years to maturity and a quoted price

of $104.$ These bonds pay interest semiannually.

Common stock: $375,000$ shares of common stock selling for $$81\mathrm{.}50$ per share. The stock has a beta of $\mathrm{.}95$

and will pay a dividend of $$3\mathrm{.}80$ next year. The dividend is expected to grow by $5$ percent

per year indefinitely.

Preferred $,10,000$ shares of $4\mathrm{.}2$ percent preferred stock selling at $$86$ per share.

stock:

Market:

$11$ percent expected return, risk$-$free rate of $3\mathrm{.}6$ percent, and a $22$ percent tax rate.