Question
The ICBM Corporation has provided you with the following information: a. The debt structure of the firm consists of 10,000 bonds with a face value
The ICBM Corporation has provided you with the following information: a. The debt structure of the firm consists of 10,000 bonds with a face value of $100, a coupon rate of 5% and a price of $90.00 and 10 years to maturity. Assume semi-annual coupon payments and a yield to maturity of 5.10%. b. 400,000 ordinary shares selling for $90 per share. The shares have a beta of 1.30 and a dividend of $5.00 will be paid next year. The dividends are expected to grow at 5% forever. c. 35,000 preference shares selling at $100.00 per share and paying a 7% dividend. d. The stock market has an expected return of 13%, the risk free rate is 4% and the tax rate is 30%. Calculate ICBM Corporations weighted average cost of capital (WACC).
can i please get with calculation by solving with equation
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