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You have been assigned to calculate the weighted Average-Cost-of-Capital for your firm, which has two sources of long-term capital. Continue with the values and assumptions

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You have been assigned to calculate the weighted Average-Cost-of-Capital for your firm, which has two sources of long-term capital. Continue with the values and assumptions outlined above. The company's marginal tax rate is 28% First, there are 6,500,000 shares of common stock, which are currently selling for $153.12. Recently, the firm announced EPS of $12.64. You feel that it is reasonable to assume that earnings will grow at 165% into the future. Second, there is an issue of 260,000 coupon bonds with a face value of $1,000, which pays 6.35% (annual) coupons, and mature in twenty-three years These bonds are currently trading for $1182.10. Calculate the yield-to-maturity on the company's bonds. (The answer is a percent, round your answer to two decimal places, eg.475) Numeric Response nces

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