Hilliard Corp. wants to calculate its weighted average cost of capital (WACC). The company’s CFO has collected the following information:  The company’s long-term bonds currently offer a yield to maturity of 8 percent.  The company’s stock price is P32 a share.  The company recently paid a dividend of P2 a share.  The dividend is expected to grow at a constant rate of 6 percent a year.  The company pays a 10 percent flotation cost whenever it issues new common stock.  The company’s target capital structure is 75 percent equity and 25 percent debt.  The company’s tax rate is 40 percent.  The firm will be able to use retained earnings to fund the equity portion of its capital budget.

Calculate the weighted average cost of capital for the following Dunkie company (WACC). The Dunkie company's bond is currently selling for 102% of par. The bond is a semi-annual, 20-year bond issued 7 years ago with a face value of $1000.00 with a coupon of 8%. There were 95,000 bonds issued. The company's corporate tax rate is 32%. The Dunkie company has issued both preferred and common stock. The preferred stock pays $3.35 per share and is selling for $97.00. There are 100,000 shares of preferred stock. The company has a beta of .95. You've calculated the return of the market to be 9.5% and the market risk premium is 5.75%. The Dunkie company stock is selling for $15.75 and there are 5,000,000 shares outstanding. What is the weighted average cost of capital for the Dunkie company?

Blooming Ltd. currently has the following capital structure:   Debt:  $2,500,000 par value of outstanding bond that pays annually 12% coupon rate with an annual before-tax yield to maturity of 10%. The bond issue has face value of $1,000 and will mature in 25 years.   Ordinary shares: 65,000 outstanding ordinary shares. The firm plans to pay a $7.50 dividend per share in the next financial year. The firm is maintaining 3% annual growth rate in dividend, which is expected to continue indefinitely.   Preferred shares: 40 000 outstanding preferred shares with face value of $100, paying fixed dividend rate of 14%.   Company tax rate is 30%.   Required: Complete the following tasks:   Calculate the current price of the corporate bond? Calculate the current price of the ordinary share if the average return of the shares in the same industry is 9%? Calculate the current value of the preferred share if the average return of the shares in the same industry is 12% Calculate the current market…