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In: Finance
You are given the following information on Parrothead Enterprises: Debt: 9,100 7.2 percent coupon bonds outstanding,...
You are given the following information on Parrothead Enterprises:
Debt: 9,100 7.2 percent coupon bonds outstanding, with 23 years to maturity and a quoted price of 108.25. These bonds pay interest semiannually and have a par value of $2,000.
Common stock: 310,000 shares of common stock selling for $66.20 per share. The stock has a beta of 1.07 and will pay a dividend of $4.40 next year. The dividend is expected to grow by 5.2 percent per year indefinitely.
Preferred stock: 9,700 shares of 4.6 percent preferred stock selling at $95.70 per share. The par value is $100 per share
Market: 10.3 percent expected return, risk-free rate of 4.45 percent, and a 22 percent tax rate.
Calculate 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 1 year agoRelated Solutions
You are given the following information concerning Parrothead Enterprises: Debt: 9,100 6.3 percent coupon bonds outstanding,...
You are given the following information concerning Parrothead
Enterprises: Debt: 9,100 6.3 percent coupon bonds outstanding, with
24 years to maturity and a quoted price of 104.25. These bonds pay
interest semiannually. Common stock: 230,000 shares of common stock
selling for $64.60 per share. The stock has a beta of .86 and will
pay a dividend of $2.80 next year. The dividend is expected to grow
by 5.1 percent per year indefinitely. Preferred stock: 8,100 shares
of 4.55 percent preferred...
You are given the following information concerning Parrothead Enterprises: Debt: 9,100 6.3 percent coupon bonds outstanding,...
You are given the following information concerning Parrothead
Enterprises: Debt: 9,100 6.3 percent coupon bonds outstanding, with
24 years to maturity and a quoted price of 104.25. These bonds pay
interest semiannually. Common stock: 230,000 shares of common stock
selling for $64.60 per share. The stock has a beta of .86 and will
pay a dividend of $2.80 next year. The dividend is expected to grow
by 5.1 percent per year indefinitely. Preferred stock: 8,100 shares
of 4.55 percent preferred...
You are given the following information concerning Parrothead Enterprises: Debt: 9,700 7.2 percent coupon bonds outstanding,...
You are given the following information concerning Parrothead
Enterprises:
Debt:
9,700 7.2 percent coupon bonds outstanding, with 23 years to
maturity and a quoted price of 105.75. These bonds pay interest
semiannually.
Common stock:
260,000 shares of common stock selling for $65.20 per share. The
stock has a beta of .92 and will pay a dividend of $3.40 next year.
The dividend is expected to grow by 5.2 percent per year
indefinitely.
Preferred stock:
8,700 shares of 4.60 percent preferred...
You are given the following information on Parrothead Enterprises: Debt: 9,800 7.3 percent coupon bonds outstanding,...
You are
given the following information on Parrothead Enterprises:
Debt:
9,800 7.3 percent
coupon bonds outstanding, with 22 years to maturity and a quoted
price of 106. These bonds pay interest semiannually and have a par
value of $1,000.
Common
stock:
265,000 shares of
common stock selling for $65.30 per share. The stock has a beta of
.98 and will pay a dividend of $3.50 next year. The dividend is
expected to grow by 5.3 percent per year indefinitely.
Preferred...
You are given the following information concerning Parrothead Enterprises: Debt: 10,400 7.4 percent coupon bonds outstanding,...
You are given the following information concerning Parrothead
Enterprises:
Debt:
10,400 7.4 percent coupon bonds outstanding, with 21 years to
maturity and a quoted price of 107.50. These bonds pay interest
semiannually.
Common
stock:
295,000 shares of common stock selling for $65.90 per share. The
stock has a beta of .99 and will pay a dividend of $4.10 next year.
The dividend is expected to grow by 5.4 percent per year
indefinitely.
Preferred
stock:
9,400 shares of 4.70 percent
preferred...
You are given the following information concerning Parrothead Enterprises: Debt: 10,900 7.4 percent coupon bonds outstanding,...
You are given the following information concerning Parrothead
Enterprises:
Debt:
10,900 7.4 percent coupon bonds
outstanding, with 21 years to maturity and a quoted price of
108.75. These bonds pay interest semiannually.
Common
stock:
320,000 shares of common stock
selling for $66.40 per share. The stock has a beta of 1.05 and will
pay a dividend of $4.60 next year. The dividend is expected to grow
by 5.4 percent per year indefinitely.
Preferred
stock:
9,900 shares of 4.7 percent
preferred...
You are looking at the following information: Debt: 6,000 5 percent coupon bonds outstanding, $1,000...
You are looking at the following information:
Debt:
6,000 5 percent coupon bonds outstanding, $1,000 par value, 21
years to maturity, selling for 104 percent of par; the bonds make
semiannual payments.
Common stock:
138,000 shares outstanding, selling for $65 per share; the beta
is 1.18.
Preferred stock:
17,000 shares of 4 percent preferred stock (review my Ch.8
slide 43: what does "...% preferred stock" phrase mean?)
outstanding, currently selling for $107 per share.
Market:
6 percent market risk...
You are looking at the following information: Debt: 2,500 8.5 percent coupon bonds outstanding, $1,000...
You are looking at the following information:
Debt:
2,500 8.5 percent coupon bonds outstanding, $1,000 par value,
21 years to maturity, selling for 104 percent of par; the bonds
make semiannual payments.
Common stock:
62,500 shares outstanding, selling for $61 per share; the beta
is 1.1.
Preferred stock:
8,000 shares of 7 percent preferred stock (review my Ch.8
slide 43: what does "...% preferred stock" phrase mean?)
outstanding, currently selling for $106 per share.
Market:
10 percent market risk...
You are looking at the following information: Debt: 3,500 5.5 percent coupon bonds outstanding, $1,000 par...
You are looking at the following
information:
Debt:
3,500 5.5 percent coupon bonds outstanding, $1,000 par value, 18
years to maturity, selling for 103 percent of par; the bonds make
semiannual payments.
Common stock:
73,500 shares outstanding, selling for $56 per share; the beta
is 1.17.
Preferred stock:
12,500 shares of 4.5 percent preferred stock outstanding,
currently selling for $105 per share.
Market:
6.5 percent market risk premium and 4 percent risk-free
rate.
The company is in the 32...
Consider the following information for Evenflow Power Co., Debt: 3,000 7 percent coupon bonds outstanding,...
Consider the following information for Evenflow Power Co.,
Debt:
3,000 7 percent coupon bonds outstanding, $1,000 par value, 20
years to maturity, selling for 103 percent of par; the bonds make
semiannual payments.
Common stock:
72,000 shares outstanding, selling for $59 per share; the beta
is 1.14.
Preferred stock:
10,000 shares of 5.5 percent preferred stock outstanding,
currently selling for $105 per share.
Market:
8 percent market risk premium and 4.5 percent risk-free
rate.
Assume the company's tax...
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