Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please show me how to get the answer Name WACC PepsiCo (PEP) has the following types of capital: Bonds Current bonds outst $1,000 and sell

image text in transcribed
please show me how to get the answer
Name WACC PepsiCo (PEP) has the following types of capital: Bonds Current bonds outst $1,000 and sell for $953.89 -Tax rate is 21.5% anding mature in 6.33 years, pay a semi annual coupon of 2.750%, have a par value of Common equity Current stock price is $115.82; the last dividend paid was $3.675, and dividends are expected to grow 4.0% per year. Beta is 0.43, the return on T-Bills is 2.60%, and the average return on a stock market index is 10.75% The equity risk premium over the company's cost of debt is 4.5%. In the next four problems, you'll calculate the weights of debt and equity, the cost of debt, the average cost of equity, and the WACC PEP has only Debt and Common Equity. Calculate the weights of each based on the following assumptions 22. -Debt: S35.113 B Equity is equal to the Market Value of stock - 1.41 B shares outstanding - Price is given above 17.7% Debt, 82.3% Equity a. b. 56.5% Debt, 43.500 Equity 45.2% Debt, 54.8% Equity c. d. 30.0% Debt, 70.0% Equity 25.0% Debt, 75.0% Equity e

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

Foundations of Financial Management

Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta

10th Canadian edition

ISBN: 1259261018, 1259261015, 978-1259024979

More Books

Students also viewed these Finance questions

Question

2. What are the key elements of a diagnostic control system?

Answered: 1 week ago

Question

What is gravity?

Answered: 1 week ago

Question

What is the Big Bang Theory?

Answered: 1 week ago