Question

et em' straight biki... White Chain Print L.. Saved Help Save & E Johnny Cake Ltd has 14 million shares of stock outstanding selling at $19 per share and an issue of $70 million in 8 percent annual coupon bonds with a maturity of 18 years, selling at 94.5 percent of par. The Par Value of each bond is $1,000. Assume Johnny Cake's weighted average tax rate is 34 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) WACCE %

Answer 1

NPER PMT PV FV TYPE RATE YTM Per Annum Tax rate After Tax Cost of debt Total No.of Payments Payment per period Present Value Future value Ending(0), Beginning(1) Rate Per Period Rate Per Period*2 18 80 1000*8% 945 1000*94.5% 1000 Cost of Equity (D1/PO)+g (3/19)+0.04 0.197894737 19.79% 8.61% RATE(18,80,-945, 1000,0) 17.22% RATE(18,80,-945, 1000,0)*2 34% 11.37% YTM*(1-Tax Rate) weight -Debt - Equity 70000000*94.5% 14000000*19 Market value $ 6,61,50,000 $ 26,60,00,000 $ 33,21,50,000 cost 0.1992 0.8008 11.37% 19.79% Weight*Cost 0.022640 0.158483 0.181122 Wacc 18.11%!