Question
Hello, could you please answer the following question and show steps? Thank you Given the following information on Ke-Ma-Gen Ltd., what is its WACC? Debt:
Hello, could you please answer the following question and show steps? Thank you
Given the following information on Ke-Ma-Gen Ltd., what is its WACC?
Debt:
Number of bonds = 10,000
Par value = $1,000
Coupon rate = 9% (semi-annual coupons)
Time to maturity = 10 years
Market value = 98% of par
Common equity:
Number of shares outstanding = 1,000,000
Par value = $1
Price per share = $3.50
Dividends per share = $0.70
Preferred equity:
Number of shares outstanding = 50,000
Price per share = $20
Dividend yield = 5%
Other information:
Tax rate = 40%
Equity beta = 1.2
Market risk premium = 16%
Risk-free rate = 5%
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