Question
plz give me ans in 10mnts its urgent Q3) Bosco Corporation is currently operating in Pharmaceutical Business. The company is planning to diversify its business
plz give me ans in 10mnts its urgent
Q3) Bosco Corporation is currently operating in Pharmaceutical Business. The company is planning to diversify its business line and operate in Food Business as well. Company has asked its analyst to calculate WACC for its new business. The book value of Companys debt is $18Mn and sells at a price of 104% of face value. The yield to maturity on the bond is 4% and coupon rate of 6%. The firm has 70,000 preferred stocks that sells at a price of $42 and pays an annual dividend of $2.5/share. The Company paid a common stock dividend of $4/share last year and its stock currently sells at a price of $58 per share. Risk free rate is 6%, market risk of return is 13% and beta is 0.94. The total book value of the firm's equity is $27 million; book value per share is $37. The firm's tax rate is 35%. Calculate WACC for Bosco Corporations new business line
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