Using the information in the two figures below calculate the WACC for Ciena Capital Structure (Millions of USD) Market Cap ST Debt LT Debt Pref. Eqty Total 5,940.9 78.7% 28.4 0.4% 1,576.7 20.9% 0.0 0.0% 7,545.9 100.0% Ciena Corp Cost of Capital - Current Market Value 3) Equity 4) Debt Cost (A-T) 5) Preferred Equity WACC Weight Cost 78.7% 11.5% 21.3% 5.1% 0.0% 0.0%

As one of the loan officers for Grove Gate Bank, calculate the monthly principal and interest, PI (in $), using this table and the month PITI (in $) for the mortgage. (Round dollars to the nearest cent.) Amount Interest Financed Rate $280,000 3.50% Term of Loan (years) 25 $ Monthly PI Annual Property Tax $6,573 Annual Insurance $2,186 $ Monthly PITI

48 The Sunland Products Co. currently has debt with a market value of $300 million outstanding. The debt consists of 9 percent coupon bonds (semiannual coupon payments) which have a maturity of 15 years and are currently priced at $1,434.63 per bond. The firm also has an issue of 2 million preferred shares outstanding with a market price of $10 per share. The preferred shares pay an annual dividend of $1.20. Sunland also has 14 million shares of common stock outstanding with a price of $20.00 per share. The firm is expected to pay a $2.20 common dividend one year from today, and that dividend is expected to increase by 5 percent per year forever. If Sunland is subject to a 40 percent marginal tax rate, then what is the firm's weighted average cost of capital? Excel Template (Note: This template includes the problem statement as it appears in your textbook. The problem assigned to you here may have different values. When using this template, copy the problem statement from this screen…

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