=(30%-(16%*(15000*900+1000000*10)-15000*900*RATE(15,10%*1000,-900,1000)*(1-21%))/(1000000*10))*2
=9.166%
5 A firm has 1,000,000 shares of common stock outstanding, each with a market price of...
Collins Inc has 5,000,000 shares of common stock outstanding with a market price of $9.00 per share. It has 25,000 bonds outstanding, each selling for $1,100. The bonds mature in 12 years, have a coupon rate of 8.5%, and pay coupons annually. The firm's beta is 1.2, the risk free rate is 5%, and the market risk premium is 9%. The tax rate is 35%. Calculate the WACC.
Aaron's Rentals has 50,000 shares of common stock outstanding at a market price of $38 a share. The company has a beta of 1.2 and the market risk premium is 8%, with risk free rate of 3.5%. The outstanding bonds mature in 10 years, have a total face value of $800,000, a face value per bond of $1,000, and a market price of $987.60 each. The bonds pay 6% coupon. The tax rate is 30 percent. What is the firm's...
toyo Manufacturing has 1,000,000 shares of common stock outstanding at a market price of $40.20 a share. Last month, the company paid an annual dividend in the amount of $2.34 per share. The dividend growth rate is 3%. Toyo Manufacturing also has 25,000 bonds outstanding with a face value of $1,000 per bond. The bonds carry a 6% coupon, pay interest annually, and mature in 10 years. The bonds are selling at 98% of face value. The company's tax rate...
On 12-31-2014, Payton Corporation had 100,000 shares of common stock outstanding and $1,000,000 (face value) of convertible bonds payable outstanding, i.e., 1,000 bonds. Each bond has a face value of $1,000. The 1,000 bonds were issued 1-1-1997, at face value, and mature 12-31-2026. The coupon interest rate is 6%. Interest is paid semiannually on 6-30 and 12-31 as long as the bonds are outstanding. Each bond is convertible into 9 shares of common stock at any time prior to maturity....
10. Deep Mines has 14 million shares of common stock outstanding with a beta of 1.15 and a market price of $42 a share. There are 900,000 shares of 9 percent preferred stock outstanding, valued at $80 a share. The 10 percent semiannual bonds have a face value of $1,000 and are selling at 91 percent of par. There are 220,000 bonds outstanding that mature in 17 years. The market risk premium is 11% percent, T-bills are yielding 7% percent,...
Your company has three million shares of common stock outstanding with a current market price of $18. The market risk premium is 7.5%, and Treasury bills are yielding 6.25 percent. There are also 32,000 bonds outstanding with an 8 percent annual coupon, 18 years to maturity, and currently sell for $940. If the stock has a beta of 1.20 and the applicable tax rate is 40%, what is the WACC for your company?
6. (Chapter 13) Loredo Mining Inc. has 20 million shares of common stock outstanding and 500,000 7 percent annual coupon bonds outstanding, par value $1,000 each. The common stock currently sells for $20 per share and has a beta of 1.3, and the bonds have 12 years to maturity and sell for 100 percent of par. The market risk premium is 7 percent, T-bills are yielding 5 percent, and Loredo's tax rate is 21 percent. a. What is the firm's...
MC algo 12-12 Capital Structure Weight Further From Center has 10,400 shares of common stock outstanding at a price of $38 per share. It also has 225 shares of preferred stock outstanding at a price of $89 per share. There are 540 bonds outstanding that have a coupon rate of 5.7 percent paid semiannually. The bonds mature in 19 years, have a face value of $1,000, and sell at 94 percent of par. What is the capital structure weight of...
Tempest Manufacturing has 8 million shares of common stock outstanding. The current share price is $73, and the book value per share is $7. Tempest Manufacturing also has one bond issue outstanding. The bond issue has a face value of $70 million, a 7 percent coupon, and sells for 97 percent of par. The bonds mature in 21 years. Suppose the most recent dividend was $4.10 and the dividend growth rate is 6 percent. Assume the par value of each...
Fletcher Manufacturing has 6.9 million shares of common stock outstanding. The current share price is $42 and the book value per share is $5. Fletcher Manufacturing also has two bond issues outstanding. The first bond issue has a total face value of $58 million, a coupon rate of 6.6%, and sells for 104% of par. The second issue has a face value of $74 million, a coupon rate of 5.9%, and sells for 102% of par. The first issue matures...