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I need help to find the WACC in graduate finance class. I need this answer really in 2 hours and it does not take that
I need help to find the WACC in graduate finance class. I need this answer really in 2 hours and it does not take that much time.
The Saunders Investment Bank has the following financing outstanding. Debt: 120,000 bonds with a coupon rate of 8 percent and a current price quote of 110; the bonds have 20 years to maturity. 290,000 zero coupon bonds with a price quote of 17.5 and 30 years until maturity. Assume semiannual compounding. Preferred stock: 210,000 shares of 6 percent preferred stock with a current price of $70, and a par value of $100. Common stock: 3,200,000 shares of common stock; the current price is $56, and the beta of the stock is 1.05. Market: The corporate tax rate is 40 percent, the market risk premium is 7 percent, and the risk-free rate is 4 percent. What is the WACC for the company? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).)Step by Step Solution
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