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Dinklage Corp. has 8 million shares of common stock outstanding. The current share price is $80,...
Dinklage Corp. has 8 million shares of common stock outstanding. The current share price is $80, 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 $125 million, a coupon rate of 5 percent, and sells for 91 percent of par. The second issue has a face value of $110 million, a coupon rate of 4 percent, and sells for 106 percent of par. The first issue matures in 23 years, the second in 9 years.
Suppose the most recent dividend was $4.80 and the dividend growth rate is 5.1 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 21 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 3 months agoRelated Solutions
Dinklage Corp. has 8 million shares of common stock outstanding. The current share price is $80,...
Dinklage Corp. has 8 million shares of common stock outstanding.
The current share price is $80, 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 $75 million, a coupon of 9 percent, and
sells for 95 percent of par. The second issue has a face value of
$45 million, a coupon of 10 percent, and sells for 108 percent of
par. The first issue...
Dinklage Corp. has 8 million shares of common stock outstanding. The current share price is $87,...
Dinklage Corp. has 8 million shares of common stock outstanding.
The current share price is $87, and the book value per share is $6.
The company also has two bond issues outstanding. The first bond
issue has a face value of $75 million, a coupon of 10 percent, and
sells for 97 percent of par. The second issue has a face value of
$50 million, a coupon of 11 percent, and sells for 105 percent of
par. The first issue...
Dinklage Corp. has 8 million shares of common stock outstanding. The current share price is $74,...
Dinklage Corp. has 8 million shares of common stock outstanding.
The current share price is $74, and the book value per share is $5.
The company also has two bond issues outstanding. The first bond
issue has a face value of $80 million, a coupon of 9 percent, and
sells for 95 percent of par. The second issue has a face value of
$60 million, a coupon of 10 percent, and sells for 108 percent of
par. The first issue...
Dinklage Corp. has 8 million shares of common stock outstanding. The current share price is $74,...
Dinklage Corp. has 8 million shares of common stock outstanding.
The current share price is $74, and the book value per share is $5.
The company also has two bond issues outstanding. The first bond
issue has a face value of $80 million, a coupon of 9 percent, and
sells for 95 percent of par. The second issue has a face value of
$60 million, a coupon of 10 percent, and sells for 108 percent of
par. The first issue...
Dinklage Corp. has 8 million shares of common stock outstanding. The current share price is $82,...
Dinklage Corp. has 8 million shares of common stock outstanding.
The current share price is $82, and the book value per share is $6.
The company also has two bond issues outstanding. The first bond
issue has a face value of $135 million, a coupon rate of 7 percent,
and sells for 93 percent of par. The second issue has a face value
of $120 million, a coupon rate of 6 percent, and sells for 102
percent of par. The...
Dinklage Corp. has 8 million shares of common stock outstanding. The current share price is $74,...
Dinklage Corp. has 8 million shares of common stock outstanding.
The current share price is $74, 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 $95 million, a coupon rate of 7 percent,
and sells for 97 percent of par. The second issue has a face value
of $80 million, a coupon rate of 6 percent, and sells for 109
percent of par. The...
Dinklage Corp. has 4 million shares of common stock outstanding. The current share price is $70,...
Dinklage Corp. has 4 million shares of common stock outstanding.
The current share price is $70, and the book value per share is $9.
The company also has two bond issues outstanding. The first bond
issue has a face value of $75 million, a coupon rate of 7 percent,
and sells for 95 percent of par. The second issue has a face value
of $60 million, a coupon rate of 6 percent, and sells for 107
percent of par. The...
Dinklage Corp. has 4 million shares of common stock outstanding. The current share price is $83,...
Dinklage Corp. has 4 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 $90 million, a coupon rate of 6 percent,
and sells for 98 percent of par. The second issue has a face value
of $60 million, a coupon rate of 7 percent, and sells for 106
percent of par. The...
Dinklage Corp. has 4 million shares of common stock outstanding. The current share price is $70,...
Dinklage Corp. has 4 million shares of common stock outstanding.
The current share price is $70, and the book value per share is $9.
The company also has two bond issues outstanding. The first bond
issue has a face value of $75 million, a coupon rate of 7 percent,
and sells for 95 percent of par. The second issue has a face value
of $60 million, a coupon rate of 6 percent, and sells for 107
percent of par. The...
Dinklage Corp. has 5 million shares of common stock outstanding. The current share price is $71,...
Dinklage Corp. has 5 million shares of common stock outstanding.
The current share price is $71, and the book value per share is
$10. The company also has two bond issues outstanding. The first
bond issue has a face value of $80 million, a coupon rate of 4
percent, and sells for 96 percent of par. The second issue has a
face value of $65 million, a coupon rate of 3 percent, and sells
for 108 percent of par. The...
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