Question
Fletcher Manufacturing has 6.9 million shares of common stock outstanding. The current share price is $42 and the book value per share is $5. Fletcher
Fletcher Manufacturing has 6.9 million shares of common stock outstanding. The current share price is $42 and the book value per share is $5. Fletcher Manufacturing also has two bond issues outstanding. The first bond issue has a total face value of $58 million, a coupon rate of 6.6%, and sells for 104% of par. The second issue has a face value of $74 million, a coupon rate of 5.9%, and sells for 102% of par. The first issue matures in 15 years, the second in 9 years. Suppose the company's stock has a beta of 0.8. The risk-free rate is 4.8% and the market risk premium is 6.1%. Assume that the overall cost of debt is the weighted average implied by the two outstanding debt issues. Both bonds make semi-annual payments. The tax rate is 35%
What is the firm's market value weight of equity?(Report answer in percentage terms and round to 2 decimal places. Do not round intermediate calculations).
What is the firm's market value weight of debt?(Report answer in percentage terms and round to 2 decimal places. Do not round intermediate calculations).
What is the firm's cost of equity?(Report answer in percentage terms and round to 2 decimal places. Do not round intermediate calculations).
What is the firm's cost of debt?(Report answer in percentage terms and round to 2 decimal places. Do not round intermediate calculations).
What is the firm's WACC?(Report answer in percentage terms and round to 2 decimal places. Do not round intermediate calculations. When using previous answers, use the rounded answer as it was given in the answer box).
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