Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

PLEASE HELP ASAP ONLY 10 MINUTES LEFT 1. Calculate the WACC of Dracula Enterprises from the following information using both the CAPM model and Discounted

PLEASE HELP ASAP ONLY 10 MINUTES LEFT

1. Calculate the WACC of Dracula Enterprises from the following information using both the CAPM model and Discounted Cash flow Method. The tax rate is 28 %. The company has issued 5-year AA rated debt of $ 400,000 which is trading at a discount of 7 %. The company has issued 70,000 shares with a par value of $ 10 and have been issued one before. The book value of the equity is 700,000 The shares are trading at a value of $ 43 per share. Given the interest rate component information below, determine the yield on a 5-year, A-rated bond. Risk free rate 5.9% Inflation premium 4.5% 5-year Maturity Risk Premium 2.0% 1-year Maturity Risk Premium 1.25 % AA Default Risk Premium 0.6% A Default Risk Premium 1.3% The return on the market was 10 % for the year The beta of Dracula Enterprises is 1.43 The recent dividend paid by the company was $ 3.00 and the next year dividend will be $ 3.5

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Day Trading Cardinal Rules For Passive Income

Authors: Brian Stclair

1st Edition

1539480313, 978-1539480310

More Books

Students also viewed these Finance questions