Question
Johnny Cake Ltd. has 12 million shares of stock outstanding selling at $23 per share and an issue of $60 million in 8 percent annual
Johnny Cake Ltd. has 12 million shares of stock outstanding selling at $23 per share and an issue of $60 million in 8 percent annual coupon bonds with a maturity of 16 years, selling at 92.0 percent of par. Assume Johnny Cakes weighted-average tax rate is 34 percent, its next dividend is expected to be $3 per share, and all future dividends are expected to grow at 4 percent per year, indefinitely. What is its WACC? (Do not round intermediate calculations and round your final answer to 2 decimal places.)
BetterPie Industries has 3 million shares of common stock outstanding, 2 million shares of preferred stock outstanding, and 10,000 bonds. Assume the common shares are selling for $47 per share, the preferred shares are selling for $24.50 per share, and the bonds are selling for 99 percent of par. |
What would be the weights used in the calculation of BetterPies WACC? (Do not round intermediate calculations and round your answers to 2 decimal places.) |
Equity weight | % |
Preferred stock weight | % |
Debt weight | % |
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