Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. dinklage corp. has 9 million shares of common stoc

Dinklage Corp. has 9 million shares of common stock outstanding. The current share price is...

50.1K

Verified Solution

Question

Accounting

image

Dinklage Corp. has 9 million shares of common stock outstanding. The current share price is $88, and the book value per share is $7. The company also has two bond issues outstanding. The first bond issue has a face value of $80 million, has a 5 percent coupon, and sells for 98 percent of par. The second issue has a face value of $55 million, has a 6 percent coupon, and sells for 106 percent of par. The first issue matures in 20 years, the second in 8 years. The most recent dividend was $6 and the dividend growth rate is 8 percent. Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 38 percent. What is the company's WACC? Multiple Choice 13.57% 5.16% 5.08% O O 10.24% O O 5.12%

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

With all that you know about SARS-CoV-2 and Covid-19, discuss a possible evolutionary scenario for SARS-CoV-2...

Biology
Q

Describe steps for conducting the assessment of the following natural hazard (25) Risk Assessment of Flood hazard...

Civil Engineering
Q

In this project, you are presented with a list of facts that you will use to...

General Management
Q

on the bob Ans 16 4 Three charges 27 125 and 64 C are situated...

Physics
Q

Evaluate the integral 1 t sin 4t dt C

Calculus
Q

P3-2 The following information was obtained from the accounts of Lukes, Inc., as of December...

Accounting
Q

17. The principle that people should pay taxes based on the benefits they receive from...

Accounting
Q

Calculate 3 profitability rations and 3 risk rations (show calculations) and use these ratios to...

Accounting
Q

Kayden compr lo siguiente: un edificio de apartamentos por $123,000, incluidos $19,500 por el terreno....

Accounting
Q

Offer your perspective on transparency. In their book Trust and Betrayal in the Workplace, Reina...

Accounting
Q

NYSE: IBM has fluctuated upwards more than 4% from April 19 to April 20. Provide...

Finance
Q

Josie's individual monthly demand for Keurig K-Cups is given by P= 10 -0.2Q (or Q...

Finance