17
The Saunders Investment Bank has the following financing outstanding. |
Debt: |
45,000 bonds with a coupon rate of 5 percent and a current price quote of 105.1; the bonds have 14 years to maturity and a par value of $1,000. 15,900 zero coupon bonds with a price quote of 24.3, 29 years until maturity, and a par value of $10,000. Both bonds have semiannual compounding. |
Preferred stock: |
140,000 shares of 3.5 percent preferred stock with a current price of $88 and a par value of $100. |
Common stock: |
2,000,000 shares of common stock; the current price is $77 and the beta of the stock is 1.05. |
Market: |
The corporate tax rate is 25 percent, the market risk premium is 7 percent, and the risk-free rate is 3.5 percent. |
What is the WACC for the company? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
17 The Saunders Investment Bank has the following financing outstanding. Debt: 45,000 bonds with a...
The Saunders Investment Bank has the following financing outstanding. Debt: 41,000 bonds with a coupon rate of 4.6 percent and a current price quote of 104.3; the bonds have 10 years to maturity and a par value of $1,000. 15,100 zero coupon bonds with a price quote of 22.3, 25 years until maturity, and a par value of $10,000. Both bonds have semiannual compounding. Preferred stock: 136,000 shares of 3.1 percent preferred stock with a current price of $83...
The Saunders Investment Bank has the following financing outstanding. Debt: 120,000 bonds with a coupon rate of 8 percent and a current price quote of 110; the bonds have 20 years to maturity. 290,000 zero coupon bonds with a price quote of 17.5 and 30 years until maturity. Assume semiannual compounding. Preferred stock: 210,000 shares of 6 percent preferred stock with a current price of $70, and a par value of $100. Common stock: 3,200,000 shares of common stock; the...
The Saunders Investment Bank has the following financing outstanding. Debt: 160,000 bonds with a coupon rate of 12 percent and a current price quote of 113; the bonds have 20 years to maturity. 330,000 zero coupon bonds with a price quote of 15.5 and 30 years until maturity. Both bonds have a par value of $1,000. Assume semiannual compounding. Preferred stock: 250,000 shares of 10 percent preferred stock with a current price of $66, and a par value of $100....
The Saunders Investment Bank has the following financing outstanding. Debt: 20,000 bonds with a coupon rate of 12 percent and a current price quote of 110; the bonds have 20 years to maturity. 190,000 zero coupon bonds with a price quote of 20.5 and 30 years until maturity. Both bonds have a par value of $1,000. Assume semiannual compounding. Preferred stock: 110,000 shares of 10 percent preferred stock with a current price of $85, and a par value of $100....
The Saunders Investment Bank has the following financing outstanding. Debt: 46,000 bonds with a coupon rate of 5.1 percent and a current price quote of 105.3; the bonds have 15 years to maturity and a par value of $1,000. 16,100 zero coupon bonds with a price quote of 24.8, 30 years until maturity, and a par value of $10,000. Both bonds have semiannual compounding. Preferred stock: 141,000 shares of 3.6 percent preferred stock with a current price of $87 and...
Consider the following information for Evenflow Power Co., Debt: 3,000 6.5 percent coupon bonds outstanding, $1,000 par value, 18 years to maturity, selling for 103 percent of par; the bonds make semiannual payments. Common stock: 75,000 shares outstanding, selling for $62 per share; the beta is 1.05. Preferred stock: 9,000 shares of 5.5 percent preferred stock outstanding, currently selling for $105 per share. Market: 8 percent market risk premium and 4.5 percent risk-free rate. Assume the company's tax...
You are given the following information on Parrothead Enterprises: Debt: 8,900 7 percent coupon bonds outstanding, with 25 years to maturity and a quoted price of 107.75. These bonds pay interest semiannually and have a par value of $2,000. Common stock: 300,000 shares of common stock selling for $66.00 per share. The stock has a beta of 1.05 and will pay a dividend of $4.20 next year. The dividend is expected to grow by 5 percent per year indefinitely. Preferred...
Consider the following information for Evenflow Power Co., Debt: 6,000 5.5 percent coupon bonds outstanding, $1,000 par value, 22 years to maturity, selling for 102 percent of par; the bonds make semiannual payments. Common stock: 144,000 shares outstanding, selling for $60 per share; the beta is 1.06. Preferred stock: 21,500 shares of 4.5 percent preferred stock outstanding, currently selling for $104 per share. Market: 7 percent market risk premium and 3.5 percent risk-free rate. Assume the company's tax rate is...
Debt 5,000 bonds par $1,000 with a maturity 20 years; semi annual compounding. Coupon rate 8%. Price $1,310. Tax rate=33% Preferred 50,000 shares of 3% par value $100 stock. Current price $63.00. Common stock 72,000 shares currently selling for $87.00. The beta of the firm is 1.17, the risk free rate is 2.78%, Market return (Rm) =8.6%. What is the cost of Debt; Cost of Preferred Stock; Cost of Equity and what is the WACC?
Consider the following information on Budget Plc: Debt: 80,000 9 coupon bonds outstanding with par value of $1,000 and 18 years to maturity, selling for 108 percent of par, the bonds make semiannual payments. Common stock: 415,000 shares outstanding, selling for $65 per share: the beta is 1.25 Preferred stock: 100,000 shares of 4.5 percent preferred stock outstanding, currently selling for $103 per share (par value=100) Market: 8 percent market risk premium and 2.8 percent risk free rate. Assume the...