AccountingCalculating the WACC. Calculate the WACC for the following
Question # 00134155
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Updated on: 11/15/2015 01:48 AM Due on: 12/15/2015
2. Calculating the WACC. Calculate the WACC for the following firm.
Debt: 3,000 bonds with a 6% coupon rate and a quoted price of 94.5. The bonds have 20 years to maturity.
Common stock: 130,000 shares of common stock. The dividends have a growth rate of 5%, the current price is $40, and the dividend next year will be $3.00. The beta of the stock is 0.9
Preferred stock: 10,000 shares of 6% preferred with a current price of $80.
Market: The corporate tax rate is 35%, the expected return on the market is 13%, and the risk-free rate is 7%.
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Rating:
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Solution: AccountingCalculating the WACC. Calculate the WACC for the following