please help with YTM in this formula matter(last pic). i do not know what to plug into it.
You are given the following information for Lighting Power Company. Assume the company's tax rate is 25 percent. Debt: 10,0005.9 percent coupon bonds outstanding $1,000 par value, 25 years to maturity, selling for 107 percent of par, the bonds make semiannual payments. Common 430,000 shares outstanding, selling for $61 per share, the beta is 112 . stock: Preferred 18,500 shares of 3.7 percent preferred stock outstanding. a $100 por stock: value, currently selling for $82 per share. Market 6 percent market risk premium and 4.7 percent risk-free rate. What is the company's WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.9. 32.16.) We will begin by finding the market value of each type of financing. We find: MVD=10,000($1,000)(1,07)=$10,700,000MVE=430,000($61)=$26,230,000MVP=18,500($82)=$1,517,000 And the total market value of the firm is: V=$10,700,000+26,230,000+1,517,000V=$38,447,000 Now, we can find the cost of equity using the CAPM. The cost of equity is: RE=.047+112(,06)RE=1142;or11.42% The cost of debt is the YTM of the bonds, so: P0=$1.070=$29.50(PVIFAR%.50)+$1.000(PVIFR:50)R=2.694%YTM=2.694%2=5.39% And the aftertax cost of debt is: RD=(1.25)(.0539)RD=0404,or4.04% RE=0.07+112(.06)RE=1142,os1142% The cost of debt is the YTM of the bonds, so: P0=51.070=$29.50PVVIFAA=,50)+$1,000(PVIFR,50)A=2.694%YTM=2.6942=5.393 And the oftertax cost of debt is: RD=(125)(0539)RD=0404,or4.04N The cost of peeferred stock is: Rp=53.70/582Rp=0451,or4.517 Now we have all of the components to caiculate the WACC. The WACC is: WACC=0404/$10700,000/538,447,000)+1142/326,230,000/338,447,000)+0451($1,517000/538,447,000)WACC=0909,or9097 Notice that we didnt inelude the f - Td term in the WACC equetion. We used the an debt in the equation, so the term is not needed here. YTM=[2FV+PV][C+(tFVPV)]