Question

Very confused on this whole concept. Would really appreciate numbered steps! Thanks a lot!!!! Ten Pins...

Very confused on this whole concept. Would really appreciate numbered steps! Thanks a lot!!!!

Ten Pins Manufacturing has 8.9 million shares of common stock outstanding. The current share price is $59, 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 $71.2 million and a coupon rate of 7.6 percent and sells for 107.7 percent of par. The second issue has a face value of $61.2 million and a coupon rate of 8.1 percent and sells for 110.1 percent of par. The first issue matures in 8 years, the second in 27 years.

The company’s stock has a beta of 1.2. The risk-free rate is 3.7 percent, and the market risk premium is 7.6 percent. Assume that 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 percent. What is the company’s WACC? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
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...
Ten Pins Manufacturing has 9 million shares of common stock outstanding. The current share price is...
Ten Pins Manufacturing has 9 million shares of common stock outstanding. The current share price is $75, 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 $85 million and a coupon rate of 10 percent and sells for 96 percent of par. The second issue has a face value of $65 million and a coupon rate of 11 percent and sells for 109 percent...
Ten Pins Manufacturing has 9 million shares of common stock outstanding. The current share price is...
Ten Pins Manufacturing has 9 million shares of common stock outstanding. The current share price is $75, 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 $85 million and a coupon rate of 10 percent and sells for 96 percent of par. The second issue has a face value of $65 million and a coupon rate of 11 percent and sells for 109 percent...
Ten Pins Manufacturing has 5 million shares of common stock outstanding. The current share price is...
Ten Pins Manufacturing 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 and a coupon rate of 7 percent and sells for 94 percent of par. The second issue has a face value of $35 million and a coupon rate of 8 percent and sells for 107 percent...
Hero Manufacturing has 9.3 million shares of common stock outstanding. The current share price is $69...
Hero Manufacturing has 9.3 million shares of common stock outstanding. The current share price is $69 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 $85 million, a coupon rate of 6.7 percent and sells for 110.1 percent of par. The second issue has a face value of $72.8 million, a coupon rate of 8.6 percent and sells for 113.9 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...
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,...
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...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT