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Question 1 3 Not yet answered Marked out of 1 0 . 0 0 Flag question You are the Chief Financial Officer for PEP Co
Question Not yet answered Marked out of Flag question You are the Chief Financial Officer for PEP Co and are preparing the way for a restructuring of the company's balance sheet. Most importantly, you need to calculate the cost of capital of the firm under the current capital structure. Given the following sources of finance, answer the questions below to help determine the firm's weighted average cost of capital. tablePEP Co: selected balance sheet data as at June Sources of finance,Book value $mBank overdraft,Coupon Bonds,Preference shares, Ordinary shares: million shares issued at cents,per share, Further information: The interest rate on the bank overdraft is per cent per annum, compounded semiannually. There are bonds, each with a face value of $ and a coup"on rate of per cent per annum, payable on June and December each year. The bonds will be redeemed at their face value on June On June the market yield is per cent per annum, compounded semiannually. A coupon payment has just been paid. per share Further information: The interest rate on the bank overdraft is per cent per annum, compounded semiannually. There are bonds, each with a face value of $ and a coupon rate of per cent per annum, payable on June and December each year. The bonds will be redeemed at their face value on June On June the market yield is per cent per annum, compounded semiannually. A coupon payment has just been paid. The preference shares have a face value of $ and pay a dividend rate of per cent per annum. Preferred dividends are payable on June each year. On June the market price of each preference share was $ A preferred dividend has just been paid. The firm pays dividends on its ordinary shares once per year on June. The last dividend, which has just been paid, was cents. Analysts predict that the longterm growth rate is per cent per annum. On June the market price of each ordinary share was $ The company operates under a classical tax system. The company tax rate is On June : What is PEP's pretax cost of debt on the bank overdraft? Give as an effective rate Enter to decimal places On June : What is PEP's pretax cost of debt on the bank overdraft? Give as an effective rate Enter to decimal places What is PEP's pretax cost of debt on the bonds? Give as an effective rate Enter to decimal places What is PEP's market value of bonds? $ million Enter in millions to decimal places What is PEP's cost of preference shares? Enter to decimal places What is PEP's market value of preference shares? $ million Enter in millions to decimal places What is PEP's cost of ordinary shares? rate Enter to decimal places What is PEP's pretax cost of debt on the bonds? Give as an effective rate Enter to decimal places What is PEP's market value of bonds? $ million Enter in millions to decimal places What is PEP's cost of preference shares? Enter to decimal places What is PEP's market value of preference shares? $ nillion Enter in millions to decimal places What is PEP's cost of ordinary shares? Enter to decimal places
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You are the Chief Financial Officer for PEP Co and are preparing the way for a restructuring of the company's balance sheet. Most importantly, you need to calculate the cost of capital of the firm under the current capital structure.
Given the following sources of finance, answer the questions below to help determine the firm's weighted average cost of capital.
tablePEP Co: selected balance sheet data as at June Sources of finance,Book value $mBank overdraft,Coupon Bonds,Preference shares, Ordinary shares: million shares issued at cents,per share,
Further information:
The interest rate on the bank overdraft is per cent per annum, compounded semiannually.
There are bonds, each with a face value of $ and a coup"on rate of per cent per annum, payable on June and December each year. The bonds will be redeemed at their face value on June On June the market yield is per cent per annum, compounded semiannually. A coupon payment has just been paid.
per share
Further information:
The interest rate on the bank overdraft is per cent per annum, compounded semiannually.
There are bonds, each with a face value of $ and a coupon rate of per cent per annum, payable on June and December each year. The bonds will be redeemed at their face value on June On June the market yield is per cent per annum, compounded semiannually. A coupon payment has just been paid.
The preference shares have a face value of $ and pay a dividend rate of per cent per annum. Preferred dividends are payable on June each year. On
June the market price of each preference share was $ A preferred dividend has just been paid.
The firm pays dividends on its ordinary shares once per year on June. The last dividend, which has just been paid, was cents. Analysts predict that the longterm growth rate is per cent per annum. On June the market price of each ordinary share was $
The company operates under a classical tax system. The company tax rate is
On June :
What is PEP's pretax cost of debt on the bank overdraft? Give as an effective rate
Enter to decimal places
On June :
What is PEP's pretax cost of debt on the bank overdraft? Give as an effective rate
Enter to decimal places
What is PEP's pretax cost of debt on the bonds? Give as an effective rate
Enter to decimal places
What is PEP's market value of bonds?
$ million Enter in millions to decimal places
What is PEP's cost of preference shares?
Enter to decimal places
What is PEP's market value of preference shares?
$ million Enter in millions to decimal places
What is PEP's cost of ordinary shares?
rate
Enter to decimal places
What is PEP's pretax cost of debt on the bonds? Give as an effective rate
Enter to decimal places
What is PEP's market value of bonds?
$ million Enter in millions to decimal places
What is PEP's cost of preference shares?
Enter to decimal places
What is PEP's market value of preference shares?
$ nillion Enter in millions to decimal places
What is PEP's cost of ordinary shares?
Enter to decimal places
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