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Can you help me calculate the WACC? You are given the following information concerning Parrothead Enterprises: Debt: 9, 900 7.4 percent coupon bonds outstanding, with
Can you help me calculate the WACC?
You are given the following information concerning Parrothead Enterprises: Debt: 9, 900 7.4 percent coupon bonds outstanding, with 21 years to maturity and a quoted price of 106.25. These bonds pay interest semiannually. Common stock: 270,000 shares of common stock selling for $65.40 per share. The stock has a beta of .94 and will pay a dividend of $3.60 next year. The dividend is expected to grow by 5.4 percent per year indefinitely. Preferred stock: 8, 900 shares of 4.7 percent preferred stock selling at $94.90 per share. Market: A 11.1 percent expected return, a risk-free rate of 5.4 percent, and a 40 percent tax rate. Required: What is the firm's cost of each form of financing? (Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places (e.g.. 32.16).) Calculate the WACC for Parrothead Enterprises. (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g.. 32.16).)Step by Step Solution
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