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please answer all with formulas! thanks Dinklage Corp. has 8 million shares of common stock outstanding. The current share price is $73. The most recent
please answer all with formulas! thanks
Dinklage Corp. has 8 million shares of common stock outstanding. The current share price is $73. The most recent dividend was $3.90 and the dividend growth rate is 6 percent. The company also has two bond issues outstanding. The first bond issue has a face value of $85 million, a 7 percent coupon, and sells for 97 percent of par. The second issue has a face value of $50 million, an 8 percent coupon, and sells for 108 percent of par. The first issue matures in 21 years, the second in 6 years. What are the company's capital structure weights on a market value basis? Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 21 percent. What is the company's WACC? E D F G H I J B A $ 6 7 8 8,000,000 73 3.90 6% 9 10 11 12 13 14 15 16 17 18 19 20 Shares outstanding Market price per share Dividend Growth rate First bond issue: Book value Coupon rate Bond price % of par) Redemption value (% of par) Settlement date Maturity date Payments per year Second bond issue: Book value Coupon rate Bond price (% of par) Redemption value (% of par) Settlement date Maturity date Payments per year Tax rate 85,000,000 7.00% 97 100 01/01/00 01/01/21 2 21 22 23 24 25 26 27 50,000,000 8.00% 108 100 01/01/00 01/01/06 2 21% Chants 28 29 Complete the following analysis. Do not hard code values in your calculations. Leave the "Basis" input blank in the YIELD function. You must use the built-in Excel function to answer this question. 30 31 Market value of equity $ 584,000,000 32 33 Market value of first bond $ 82,450,000 34 Market value of second bond 35 36 37 38 39 40 Market value of debt & equity Market value weight of equity 41 Market value weight of first bond 42 43 44 Market value weight of second bond 45 Cost of equity 46 47 48 Pretax cost of first bond Chants A1 V A B D E F G H Market value of second bond 35 36 37 38 39 Market value of debt & equity Market value weight of equity 40 41 Market value weight of first bond 42 43 Market value weight of second bond 44 45 Cost of equity 46 47 Pretax cost of first bond 48 Aftertax cost of first bond 49 50 51 52 53 Pretax cost of second bond Aftertax cost of second bond 54 55 56 WACC 57 Step by Step Solution
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