You are given the following information on Parrothead Enterprises:
| Debt: | 9,800 7.3 percent coupon bonds outstanding, with 22 years to maturity and a quoted price of 106. These bonds pay interest semiannually and have a par value of $1,000. |
| Common stock: | 265,000 shares of common stock selling for $65.30 per share. The stock has a beta of .98 and will pay a dividend of $3.50 next year. The dividend is expected to grow by 5.3 percent per year indefinitely. |
| Preferred stock: | 8,800 shares of 4.65 percent preferred stock selling at $94.80 per share. The par value is $100 per share. |
| Market: | 11.2 percent expected return, risk-free rate of 4 percent, and a 23 percent tax rate. |
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You are given the following information on Parrothead Enterprises: Debt: 9,300 6.5 percent coupon bonds outstanding, with 22 years to maturity and a quoted price of 104.75. These bonds pay interest semiannually and have a par value of $1.000. Common stock: 240,000 shares of common stock selling for $64.80 per share. The stock has a beta of.93 and will pay a dividend of $3.00 next year. The dividend is expected to grow by 5.3 percent per year indefinitely. Preferred stock:...
You are given the following information on Parrothead Enterprises: Debt: 9,300 6.5 percent coupon bonds outstanding,...
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