Question
Company A issued 10,000 bonds at nominal value 10 years ago, the maturity of these bonds were 20 years, and the coupon rate was 20
Company A issued 10,000 bonds at nominal value 10 years ago, the maturity of these bonds were 20 years, and the coupon rate was 20 percent. The same bonds are traded at an interest rate of 14 percent today.
Again, 10 years ago, 4 million stocks were issued for 50 TL each, and it was announced that the stocks would distribute dividends that grow regularly every year. Accordingly, the dividend model announced by the company 10 years ago is as follows: Div1 = 10 TL, and the regular growth rate in dividends is g = 5%. The same stocks are traded with an expected return of 30 percent today.
Calculate the current market value of the company and the Weighted Average Cost of Capital in line with this information.
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