Question
He also wants to know the WACC and has given you the following information about your capital budgeting: The 20 year $1000 par value mortgage
He also wants to know the WACC and has given you the following information about your capital budgeting:
The 20 year $1000 par value mortgage bonds were sold at $952.67 and pay 8%. They had a $47.67 flotation cost.
What is the cost of the mortgage bonds?
Answer:
The 15 year $500 par value debentures were sold at $486.50 and pay 6%. They had a $26.50 flotation cost.
What is the cost of the debentures?
Answer:
DWOTT paid a dividend of $.80 last year and expects them to grow 15% next year and into the foreseeable future. The stock currently trades at $36.70.
What is the cost of retained earnings?
Answer:
What is the weighted average cost of capital?
Answer:
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Introduces Quantitative Finance
Authors: Paul Wilmott
2nd edition
470319585, 470319581, 978-0470319581
