Question
part 1-4 was answered. Thank you anonymous! Colfax Inc. manufactures high-end ice cream makers to sell to companies across the globe. The following market data
part 1-4 was answered. Thank you anonymous!
Colfax Inc. manufactures high-end ice cream makers to sell to companies across the globe. The following market data on Colfax are current and available:
Debt 130,000 6.1 percent coupon bonds outstanding, 25 years to maturity, selling for 104 percent of par; the bonds have a par value of $2,000 and make semiannual payments.
Common stock 9,900,000 shares outstanding, selling for $68 per share; the beta is 1.20.
Preferred stock 400,000 shares of preferred stock outstanding, selling for $87 per share with a $3.65 stated dividend. The next dividend payment is in exactly one year.
Market 7 percent expected market risk premium; 3.1 percent risk-free rate.
Q4. Calculate the WACC using the market-value weight. Present your answer as % rounded to two decimal places (e.g., 12.34%). 10 pts.
Q5. Suppose Cougar Gold Inc., Colfax biggest competitor, has 400,000 shares of preferred stock outstanding with $3.65 stated dividend. What is Cougar Golds preferred stock price if the next dividend is in exactly 7 months? Round your answer to two decimal places. 6 pts.
Q6. Suppose Cougar Gold Inc. has outstanding bonds that are convertible but otherwise identical to Colfax bonds. The bonds have a conversion ratio of 25. Cougar Golds stock is selling for $83.5 per share.
a. What is Cougar Gold bonds conversion price? Round your answer to two decimal places. 6 pts.
b. What is Cougar Gold bonds conversion value? Round your answer to two decimal places. 6 pts
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