Use 4 decimals Calculate the Components of WACC and the WACC Cost of Debt 30...
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Use 4 decimals Calculate the Components of WACC and the WACC Cost of Debt 30 year Bonds Current Price 105.5 % of par value 7.6 % Coupon Rate Semi Annual Bond 5 years to maturity Tax Rate: 40% What is the Cost of Debt? After Tax 10 pts Preferred Stock Dividend $7.50 Current Price $60.00 What is the Cost of Preferred? 10 pts Equity Risk Free Rate 6.50% Market Risk Premium 6.25% Stock Beta 0.7 What is the Cost of Equity? 10 pts Market Value...Debt/Equity 10,000 Bonds Outstanding Selling @ 105.5% of Par Value 43,000 Preferred Stock@ $60.00 300,000 Shares of Common Stock @ $40.00 per share What is the WACC? 20 pts Given the WACC Calculate the NPV for the following capital budgeting decision Investment is Cash Flows $400,000 1st Year 55,000 2nd Year 65,000 3rd Year 75,000 4th Year 85,000 150,000 5th Year NPV is Accept Decision (Circle One) Reject 40 pts Calculate Payback 10 pts
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