The information given here has been gathered about Oryan Swim- Where, Ltd. Based on this information, estimate

Question:

The information given here has been gathered about O’ryan Swim- Where, Ltd.

Based on this information, estimate O’ryan’s WACC.

Current market value of common shares (10 million outstanding) $23.63/share

Next year’s expected cash dividend $1.92/share

Expected constant annual dividend growth rate 8%

Current market value of bonds

(100,000 bonds outstanding, 8.5% coupon, maturing in 21 years) $835.00/bond Corporate tax rate 34%

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...