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In: Accounting

Today is May 7, 2020. Surtsey Corp. has 275,000 shares of 4.7% preferred stock outstanding, with...

Today is May 7, 2020.

Surtsey Corp. has 275,000 shares of 4.7% preferred stock outstanding, with a par value of $50 per share. Dividends are paid annually and the preferred stock is currently selling for $41.50 per share.

There are 2,500,000 shares of common stock issued and outstanding. The most recent quote for the common stock of Surtsey Corp. is provided below:

Firm Ticker Open High Low Close Net Chg Vol PE Div YTD % Chg
Surtsey Corp. SCS 19.79 20.01 19.64 19.99 -0.50 7,525,000 14.5 0.87 6.4

There are 120,000 bonds outstanding. A coupon was paid yesterday. The most recent bond quote for Surtsey Corp. is provided below:

Firm Symbol Coupon Maturity

Rating Moody's/S&P

 High Low Last Change
Surtsey Corp. SCS689002 3.81% May 2045 Aa/AA- 81.654 80.211 81.387 0.458

The firm's marginal tax rate is 21%.

What is the firm's WACC?

Enter your answer in percent format, with only 2 decimal places (eg. 10.55%).

Solutions

Expert Solution

Surtsey Corp. has 275,000 shares of 4.7% preferred stock outstanding, with a par value of $50 per share

ekkarill92 answered 2 years ago
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