Question
JISOO CORP has the following information: a. Debt 30,000 bonds (face value = $1,000) with a coupon rate of 6% and 25 years to maturity.
JISOO CORP has the following information:
a. Debt 30,000 bonds (face value = $1,000) with a coupon rate of 6% and 25 years to maturity. The market price of the bonds is $1100 each. The bonds make annual payments.
b. Common stock 400,000 shares of common stocks. The market price of the common stock is $79/stock. In addition, the stocks beta is 1.2.
c. Preferred stock 250,000 shares of preferred stocks with the dividend of $4/year and the current price of $75. The yield of government bond is 3% and the market risk premium is 7.5%. Moreover, the tax rate is 21% for JISOO CORP.
Calculate the WACC for the company.
Please explain without excel because I want to do it myself, thank you.
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