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QUESTION 3 [20 MARKS] Given the following information for Clayworks Co is given as follows, Assume the company's tax rate is 35 percent Debt: 8,000
QUESTION 3 [20 MARKS] Given the following information for Clayworks Co is given as follows, Assume the company's tax rate is 35 percent Debt: 8,000 & 6.5 percent coupon bonds outstanding, P1,000 par value, 25 years to maturity, selling for 106 percent of par, the bonds make semiannual payments. Common stock: 310,000 shares outstanding, selling for P57 per share the beta is 1.05. Preferred stock: 15,000 shares of 4 percent preferred stock outstanding, currently selling for P72 per share. Market 7 percent market risk premium and 4.5 percent risk-free rate. REQUIRED: (20 marks) Calculate the WACC for this company
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