In: Finance
You are given the following information about a company. The company pays no dividends. What is the company’s WACC?
Debt:
Common Stock: Market:
90,000 bonds with a par value of $2,000 and a quoted price of 108.40. The bonds have coupon rate of 5.3 percent and 20 years to maturity. 40,000 zero coupon bonds with a quoted price of 29.15, 25 years to maturity, and a par value of $10,000. Assume semiannual coupon payments.
5.5 million shares of stock selling at a market price of $95 with a beta of 1.15.
The market risk premium is 6.8 percent and the risk-free rate is 2.8 percent. The tax rate is 21 percent.
*Please show excel formulas with answer