You are given the following information on Parrothead Enterprises Debt 9,800 7 3 percent coupon bonds outstanding, with 22 years to maturity and a quoted price of 106 These bonds pay interest semiannually and have a par value of $1,000 Common stock 265,000 shares of common stock selling for $65 30 per share The stock has a beta of 98 and will pay a dividend of $3 50 next year The dividend is expected to grow by 5 3 percent per year indefinitely Preferred stock 8,800 shares of 4 65 percent preferred stock selling at $94 80 per share The par value is $100 per share Market 11 2 percent expected return, risk free rate of 4 percent, and a 23 percent tax rate Calculate the company's WACC (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e g , 32 16 )

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Posted on Oct 03, 2024

You are given the following information on Parrothead Enterprises: Debt: 9,800 7.3 percent coupon bonds outstanding, with 22 years to maturity and a quoted price

You are given the following information on Parrothead Enterprises:

Debt:	9,800 7.3 percent coupon bonds outstanding, with 22 years to maturity and a quoted price of 106. These bonds pay interest semiannually and have a par value of $1,000.

Common stock:	265,000 shares of common stock selling for $65.30 per share. The stock has a beta of .98 and will pay a dividend of $3.50 next year. The dividend is expected to grow by 5.3 percent per year indefinitely.

Preferred stock:	8,800 shares of 4.65 percent preferred stock selling at $94.80 per share. The par value is $100 per share.

Market:	11.2 percent expected return, risk-free rate of 4 percent, and a 23 percent tax rate.

Calculate the company's WACC. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)