Question
In: Finance
Bonaime, Inc., has 7.9 million shares of common stock outstanding. The current share price is $62.90,...
Bonaime, Inc., has 7.9 million shares of common stock
outstanding. The current share price is $62.90, and the book value
per share is $5.90. The company also has two bond issues
outstanding. The first bond issue has a face value of $71.9
million, a coupon rate of 7.4 percent, and sells for 88.5 percent
of par. The second issue has a face value of $36.9 million, a
coupon rate of 8.4 percent, and sells for 87.5 percent of par. The
first issue matures in 18 years, the second in 10 years. The most
recent dividend was $3.80 and the dividend growth rate is 5
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 40 percent.
What is the company’s WACC? (Do not round intermediate
calculations and enter your answer as a percent rounded to 2
decimal places, e.g., 32.16.)
Solutions
jeff jeffy answered 8 months agoRelated Solutions
Masterson, Inc., has 5.1 million shares of common stock outstanding. The current share price is $92.50,...
Masterson, Inc., has 5.1 million shares of common stock
outstanding. The current share price is $92.50, and the book value
per share is $12.75. The company also has two bond issues
outstanding. The first bond issue has a face value of $87 million,
a coupon rate of 5.5 percent, and sells for 97.1 percent of par.
The second issue has a face value of $59 million, a coupon rate of
5.6 percent, and sells for 107.7 percent of par. The...
Masterson, Inc., has 4.1 million shares of common stock outstanding. The current share price is $88.00,...
Masterson, Inc., has 4.1 million shares of common stock
outstanding. The current share price is $88.00, and the book value
per share is $10.50. The company also has two bond issues
outstanding. The first bond issue has a face value of $78 million,
a coupon rate of 5.4 percent, and sells for 96.2 percent of par.
The second issue has a face value of $50 million, a coupon rate of
6.1 percent, and sells for 105.9 percent of par. The...
Bonaime, Inc., has 6.1 million shares of common stock outstanding. The current share price is $61.10,...
Bonaime, Inc., has 6.1 million shares of common stock
outstanding. The current share price is $61.10, and the book value
per share is $4.10. The company also has two bond issues
outstanding. The first bond issue has a face value of $70.1
million, a coupon rate of 7.1 percent, and sells for 97.5 percent
of par. The second issue has a face value of $35.1 million, a
coupon rate of 6.6 percent, and sells for 96.5 percent of par. The...
Rooster, Inc., has 9 million shares of common stock outstanding. The current share price is $55,...
Rooster, Inc., has 9 million shares of common stock
outstanding. The current share price is $55, and the book value per
share is $6. Rooster also has two bond issues outstanding that both
originally sold at par. The first bond issue has a face value of
$90 million, has an 8 percent coupon, and sells for 104 percent of
par. The second issue has a face value of $50 million, has a 7.5
percent coupon, and sells for 106 percent...
Masterson, Inc., has 9 million shares of common stock outstanding. The current share price is $69,...
Masterson, Inc., has 9 million shares of common stock
outstanding. The current share price is $69, and the book value per
share is $8. The company also has two bond issues outstanding. The
first bond issue has a face value of $70 million, has a coupon rate
of 6 percent, and sells for 94 percent of par. The second issue has
a face value of $55 million, has a coupon rate of 5 percent, and
sells for 106 percent of...
Bonaime, Inc., has 7 million shares of common stock outstanding. The current share price is $62.00,...
Bonaime, Inc., has 7 million shares of common stock outstanding.
The current share price is $62.00, and the book value per share is
$5.00. The company also has two bond issues outstanding. The first
bond issue has a face value of $71 million, a coupon rate of 7
percent, and sells for 93 percent of par. The second issue has a
face value of $36 million, a coupon rate of 7.5 percent, and sells
for 92 percent of par. The...
Masterson, Inc., has 7 million shares of common stock outstanding. The current share price is $83,...
Masterson, Inc., has 7 million shares of common stock
outstanding. The current share price is $83, and the book value per
share is $8. The company also has two bond issues outstanding. The
first bond issue has a face value of $140 million, has a coupon
rate of 6 percent, and sells for 94 percent of par. The second
issue has a face value of $125 million, has a coupon rate of 5
percent, and sells for 105 percent of...
Masterson, Inc., has 4.1 million shares of common stock outstanding. The current share price is $88.00,...
Masterson, Inc., has 4.1 million shares of common stock
outstanding. The current share price is $88.00, and the book value
per share is $10.50. The company also has two bond issues
outstanding. The first bond issue has a face value of $78 million,
a coupon rate of 5.4 percent, and sells for 96.2 percent of par.
The second issue has a face value of $50 million, a coupon rate of
6.1 percent, and sells for 105.9 percent of par. The...
Vedder, Inc., has 5 million shares of common stock outstanding. The current share price is $73,...
Vedder, Inc., has 5 million shares of common stock outstanding.
The current share price is $73, and the book value per share is $9.
Vedder also has two bond issues outstanding. The first bond issue
has a face value of $60 million, a coupon rate of 7 percent, and
sells for 98 percent of par. The second issue has a face value of
$40 million, a coupon rate of 6.5 percent, and sells for 97 percent
of par. The first...
Celom has 5 million shares of common stock outstanding with a current price per share of...
Celom has 5 million shares of common stock outstanding with a
current price per share of $15 per share. The company has 2 million
shares of preferred stock outstanding with a current price of $20
per share. The company also has 5,000 bonds outstanding with a par
value of $1,000 each and a coupon rate of 6%. The bonds are quoted
at 102. What weightings should Celom use for its WACC
calculation?
Therbo Inc's market weighing's of its debt, preferred...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Suppose a company is looking to hedge a risk in the derivatives market. What, fundamentally, is...
- Training and Development assignment. Describe the usage of Computer Based Training (CBT) in McDonald's Company training...
- PUT IN JAVA PROGRAMMING LANGUAGE The Rectangle class: Design a class named Rectangle to represent a...
- Journal article summary on inter-group conflict Peer Reviewed Journal article from past 3 years. Please include...
- "Ethical Considerations" Please respond to the following: Reflect upon the responsibilities placed on auditors by the...
- A Japanese company has a bond outstanding that sells for 93 percent of its ¥100,000 par...
- What is the difference among the principles of modularization, abstraction, encapsulation, and separation of interface and...
ADVERTISEMENT