Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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The following is the capital structure of your company.
Debt: 25,000 bonds. 7.4 annual % coupon, with semiannual payments. $1,000 face
value. 21 years to maturity. Priced at $1,060 per bond.
Preferred stock: 26,000 shares preferred stock. Priced at $97 per share. $5.20
dividend per share.
Common Stock: 580,000 shares. Priced at $76 per share. Beta is 1.15.
Market: 6% market risk premium. 4.8% risk-free rate. Company's tax rate is 25%.
What is the company's Weighted Average Cost of Capital?
(Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 12.34.)
WACC
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Transcribed Image Text:The following is the capital structure of your company. Debt: 25,000 bonds. 7.4 annual % coupon, with semiannual payments. $1,000 face value. 21 years to maturity. Priced at $1,060 per bond. Preferred stock: 26,000 shares preferred stock. Priced at $97 per share. $5.20 dividend per share. Common Stock: 580,000 shares. Priced at $76 per share. Beta is 1.15. Market: 6% market risk premium. 4.8% risk-free rate. Company's tax rate is 25%. What is the company's Weighted Average Cost of Capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 12.34.) WACC
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