Debt: 30,000 bonds outstanding currently trading at $950 per bond. The bonds have a 5.65%...
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Debt: 30,000 bonds outstanding currently trading at $950 per bond. The bonds have a 5.65% coupon rate that pays semi-annually. The bond has 20 years remaining to maturity.
Preferred Stock: 100,000 shares of preferred stock that pays $6.60 per share dividend and is currently trading for $90 per share.
Common Stock: 1,400,000 shares with current market price of $76 per share. The firm is expected to pay $4.55 per share dividend next year, the growth rate is 5.80%. The market risk premium is 7.70% and the risk free rate is 2.40%. The firm beta is 1.20.
Assume a 30% tax rate.
Calculate WACC.
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