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Rollins Corporation is estimating its WACC. It has 5,000 bonds outstanding with a face value of $1,000 per bond. The bonds have a 12% coupon,
Rollins Corporation is estimating its WACC. It has 5,000 bonds outstanding with a face value of $1,000 per bond. The bonds have a 12% coupon, pay interest annually, and mature in 20 years. The bonds are selling at 98% of face value and have a before tax cost of debt of 7.36%. Rollins is a constant-growth firm. It has 10,000,000 shares of common stock outstanding at a market price of $27 a share. Last month, Rollins paid an annual dividend in the amount of $2 per share and has a growth rate of 8%. The company's tax rate is 40%. What is the firm's weighted average cost of capital
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