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Stuck on question 3 for Finance homework. No excel, please. 3. Maggie's Acting Company has 7,000,000 shares of stock outstanding at a price of $60/share

Stuck on question 3 for Finance homework. No excel, please.

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3. Maggie's Acting Company has 7,000,000 shares of stock outstanding at a price of $60/share and a Beta of 1.1. They have two bond issues: 1) $25,000,000 of Face Value maturing in 10 years. The price of one bond is 97, or 97% of Par. 2) $40,000,000 of Face Value maturing in 5 years. The price of one bond is 102, or 102% of par. The Risk-free rate is 3% and the Expected Return on the Market is 10%. Companies with a similar risk profile to Maggie's Acting Company have a yield spread of 1.0% for 5-year bonds and 1.5% for 10-year bonds. a. What is the cost of debt (Rd)? i MV of total debt? ii. MV of debt 1? ili. MV of debt 2? iv. Weight of debt 1? V. Weight of debt 2? vi. Cost of debt 1? 3 vii. Cost of debt 2? viii. Weighted average cost of debt which is Rd? 1. (Wd1 * Rd1) + (Wd2 * Rd2) b. What is the cost of equity (Re)? C. What is the market value of the equity (MVe)? d. What is the value of the firm (MV + MVe) e. What is the weight of debt (Wd)? f. What is the weight of equity (We)? g. What is the company's WACC? 4

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