Johnny Cake Ltd. has 10 million shares of stock outstanding selling at $22 per share and an issue of $50 million in 8 percent annual coupon bonds with a maturity of 18 years, selling at 90.5 percent of par. Assume Johnny Cake's weighted-average tax rate is 21 percent, its next dividend is expected to be $3 per share, and all future dividends are expected to grow at 4 percent per year, indefinitely. What is its WACC? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Answer is complete but not entirely correct. WACC 10.04 %

Johnny Cake Ltd. has 10 million shares of stock outstanding selling at $22 per share and an issue of $50 million in 8 percent annual coupon bonds with a maturity of 18 years, selling at 90.5 percent of par. Assume Johnny Cake's weighted-average tax rate is 21 percent, its next dividend is expected to be $3 per share, and all future dividends are expected to grow at 4 percent per year, indefinitely. What is its WACC? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Answer is complete but not entirely correct. WACC 10.04 %

Name: man.1 Johnny Cake Ltd. has 10 million shares of stock outstanding sell
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Description: man.1 Johnny Cake Ltd. has 10 million shares of stock outstanding selling at $22 per share and an issue of $50 million in 8 percent annualcoupon bonds with a maturity of 18 years, selling at 90.5 percent of par. Assume Johnny Cake's weighted-average

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter7: Common Stock: Characteristics, Valuation, And Issuance

Section: Chapter Questions

Problem 17P

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