Question
In the previous problem, suppose the company's stock has a beta of 1.15. The risk-free rate...
In the previous problem, suppose the company's stock has a beta of 1.15. The risk-free rate is 3.7%, and the market risk premium is 7%. Assume the overall cost of debt is the weighted average implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 35%. What is the company's WACC? Additional information: 8.3 million shares of common stock outstanding, Current share price = $53 , and the book value per share is $4. The company also has two bond issues outstanding. The first bond issue has a face value of $70 million and a coupon rate of 7% and sells for 108.3% of par. The first issue matures in 8 years, the second in 27 years.
Homework Answers
Answer #1
Not the answer you're looking for?
Similar Questions
Filer Manufacturing has 8.3 million shares of common stock outstanding. The current share price is $53....
Filer Manufacturing has 8.3 million shares of common stock
outstanding. The current share price is $53. The company also has
two bond issues outstanding. The first bond issue has a face value
of $70 million and a coupon rate of 7 percent and sells for 108.3
percent of par. The second issue has a face value of $60 million
and a coupon rate of 7.5 percent and sells for 108.9 percent of
par. The first issue matures in 8 years,...
Hero Manufacturing has 9 million shares of common stock outstanding. The current share price is $72...
Hero Manufacturing has 9 million shares of common stock
outstanding. The current share price is $72 and the book value per
share is $3. The company also has two bond issues outstanding. The
first bond issue has a face value of $70 million, a coupon rate of
6.4 percent and sells for 109.5 percent of par. The second issue
has a face value of $57.8 million, a coupon rate of 8.3 percent and
sells for 113.3 percent of par. The...
Ten pins manufacturing has 7.3 million shares of common stock outstanding. The current share price is...
Ten
pins manufacturing has 7.3 million shares of common stock
outstanding. The current share price is $43 and book value per
share is $3. The company also has two bond issues outstanding. The
first bond issue has a face value of $68 million and a coupon rate
of 6 percent and sells for 109.3 percent of par. The second issue
has a face value of $58 million and a coupon rate of 6.5 percent
and sells for 106.9 percent of...
Company X has 8 million shares of common stock outstanding. The current share price is $57,...
Company X has 8 million shares of common stock outstanding. The
current share price is $57, and the book value per share is $5. The
company also has two bond issues outstanding. The first bond issue
has a face value of $70.8 million and a coupon rate of 7 percent
and sells for 107 percent of par. The second issue has a face value
of $60 million and a coupon rate of 7 percent and sells for 109
percent of...
Company X has 8 million shares of common stock outstanding. The current share price is $57,...
Company X has 8 million shares of common stock outstanding. The
current share price is $57, and the book value per share is $5. The
company also has two bond issues outstanding. The first bond issue
has a face value of $70.8 million and a coupon rate of 7 percent
and sells for 107 percent of par. The second issue has a face value
of $60 million and a coupon rate of 7 percent and sells for 109
percent of...
Dinklage Corp. has 7 million shares of common stock outstanding. The current share price is $86,...
Dinklage Corp. has 7 million shares of common stock outstanding.
The current share price is $86, and the book value per share is $5.
The company also has two bond issues outstanding. The first bond
issue has a face value of $70 million, has a 9 percent coupon, and
sells for 96 percent of par. The second issue has a face value of
$45 million, has a 10 percent coupon, and sells for 104 percent of
par. The first issue...
Dinklage Corp. has 5 million shares of common stock outstanding. The current share price is $84,...
Dinklage Corp. has 5 million shares of common stock outstanding.
The current share price is $84, and the book value per share is $7.
The company also has two bond issues outstanding. The first bond
issue has a face value of $60 million, has a 7 percent coupon, and
sells for 94 percent of par. The second issue has a face value of
$35 million, has a 8 percent coupon, and sells for 107 percent of
par. The first issue...
Bonaime, Inc., has 7.8 million shares of common stock outstanding. The current share price is $62.80,...
Bonaime, Inc., has 7.8 million shares of common stock
outstanding. The current share price is $62.80, and the book value
per share is $5.80. The company also has two bond issues
outstanding. The first bond issue has a face value of $71.8
million, a coupon rate of 7.3 percent, and sells for 89 percent of
par. The second issue has a face value of $36.8 million, a coupon
rate of 8.3 percent, and sells for 88 percent of par. The...
Hero Manufacturing has 7.9 million shares of common stock outstanding. The current share price is $83...
Hero Manufacturing has 7.9 million shares of common stock
outstanding. The current share price is $83 and the book value per
share is $4. The company also has two bond issues outstanding. The
first bond issue has a face value of $65 million, a coupon rate of
6.7 percent and sells for 107.3 percent of par. The second issue
has a face value of $45.8 million, a coupon rate of 7.2 percent and
sells for 111.1 percent of par. The...
Hero Manufacturing has 8.9 million shares of common stock outstanding. The current share price is $73...
Hero Manufacturing has 8.9 million shares of common stock
outstanding. The current share price is $73 and the book value per
share is $6. The company also has two bond issues outstanding. The
first bond issue has a face value of $65 million, a coupon rate of
6.3 percent and sells for 109.3 percent of par. The second issue
has a face value of $52.8 million, a coupon rate of 8.2 percent and
sells for 113.1 percent of par. The...
ADVERTISEMENT
Need Online Homework Help?
Get Answers For Free
Most questions answered within 1 hours.
ADVERTISEMENT
Active Questions
asked 19 minutes ago
asked 20 minutes ago
asked 30 minutes ago
asked 31 minutes ago
asked 35 minutes ago
asked 36 minutes ago
asked 36 minutes ago
asked 37 minutes ago
asked 39 minutes ago
asked 46 minutes ago
asked 51 minutes ago
asked 1 hour ago