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****PLEASE SHOW IN EXCEL**** 1. Conseco Inc. has the outstanding bonds maturing in 17 years and the bonds have a total face value of $750,000,
****PLEASE SHOW IN EXCEL****
1. Conseco Inc. has the outstanding bonds maturing in 17 years and the bonds have a total face value of $750,000, a face value per bond of $1,000, and a market price of $1,011 each. The bonds pay 8 percent interest, semiannually. Also, the firm has 58,000 shares of common stock outstanding at a market price of $36 a share. The common stock just paid a $1.64 annual dividend and has a dividend growth rate of 2.8 percent. There are 12,000 shares of 6 percent preferred stock outstanding at a market price of $51 a share. The preferred stock has a par value of $100. The tax rate is 34 percent. What is the firm's weighted average cost of capital? Show all your work. |
A. 7.74% |
B. 8.95% |
C. 9.19% |
D. 10.68% |
E. 12.43% |
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