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%).

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

Spicer Reports Corp has 400,000 shares of common stock outstanding, 200,000 shares of preferred stock outstanding,...

Spicer Reports Corp has 400,000 shares of common stock outstanding, 200,000 shares of preferred stock outstanding, and 40,000 bonds. If the common shares are selling for $25 per share, the preferred shares are selling for $12.50 per share, and the bonds are selling for 97 percent of par, what would be the weight used for common stock equity in the computation of Spicer's WACC? A. 18.59% B. 19.49% C. 24.37% D. 62.50% E. 79.75% Comfort Chair, Inc. has a $1.5...

Sports Corp has 11.8 million shares of common stock outstanding, 6.8 million shares of preferred stock...

Sports Corp has 11.8 million shares of common stock outstanding, 6.8 million shares of preferred stock outstanding, and 2.8 million bonds. If the common shares are selling for $26.8 per share, the preferred share are selling for $14.3 per share, and the bonds are selling for 96.82 percent of par, what would be the weight used for equity in the computation of Sports's WACC?

(WACC) A company has common stock, preferred shares, and debt outstanding. As of today, the common...

(WACC) A company has common stock, preferred shares, and debt outstanding. As of today, the common stock is valued at $10 per share, with 2 million shares outstanding. It has a beta of 5, and market return is estimated to be 4% while treasury bills offer 1.5% risk-free rate. The preferred stock is valued at $15 per share, which pays dividend of $2 each year at a constant growth rate of 3%. Preferred stocks have 5 million shares outstanding. Finally,...

(WACC) A company has common stock, preferred shares, and debt outstanding. As of today, the common...

(WACC) A company has common stock, preferred shares, and debt outstanding. As of today, the common stock is valued at $10 per share, with 2 million shares outstanding. It has a beta of 5, and market return is estimated to be 4% while treasury bills offer 1.5% risk-free rate. The preferred stock is valued at $15 per share, which pays dividend of $2 each year at a constant growth rate of 3%. Preferred stocks have 5 million shares outstanding. Finally,...

Riverbed Company has outstanding 2,700 shares of $100 par, 7% preferred stock and 14,200 shares of...

Riverbed Company has outstanding 2,700 shares of $100 par, 7% preferred stock and 14,200 shares of $10 par value common. The following schedule shows the amount of dividends paid out over the last 4 years. Allocate the dividends to each type of stock under assumptions (a) and (b). Express your answers in per-share amounts using the format shown below. (Round the rate of participation to 4 decimal places, e.g.1.4278%. Round answers to 2 decimal places, e.g. $6.85.) Assumptions (a) Preferred,...

Bonita Company has outstanding 2,600 shares of $100 par, 7% preferred stock and 16,400 shares of...

Bonita Company has outstanding 2,600 shares of $100 par, 7% preferred stock and 16,400 shares of $10 par value common. The following schedule shows the amount of dividends paid out over the last 4 years. Allocate the dividends to each type of stock under assumptions (a) and (b). Express your answers in per-share amounts using the format shown below. (Round the rate of participation to 4 decimal places, e.g.1.4278%. Round answers to 2 decimal places, e.g. $6.85.) Assumptions (a) Preferred,...

Empire Today Inc. has 10 million shares of common stock outstanding, 300,000 shares of 5% preferred...

Empire Today Inc. has 10 million shares of common stock outstanding, 300,000 shares of 5% preferred stock outstanding, and 7 million of 6.7 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $85 per share and has a beta of 1.15, the preferred stock currently sells for $103 per share, and the bonds have 20 years to maturity and sell for 93% of par. The market risk premium is 11 percent, T-bills are yielding 2.14...

Empire Today Inc. has 10 million shares of common stock outstanding, 300,000 shares of 5% preferred...

Empire Today Inc. has 10 million shares of common stock outstanding, 300,000 shares of 5% preferred stock outstanding, and 7 million of 6.7 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $85 per share and has a beta of 1.15, the preferred stock currently sells for $103 per share, and the bonds have 20 years to maturity and sell for 93% of par. The market risk premium is 11 percent, T-bills are yielding 2.14...

Pealand Company has 50,000 shares of common stock outstanding and 2,000 shares of preferred stock outstanding....

Pealand Company has 50,000 shares of common stock outstanding and 2,000 shares of preferred stock outstanding. The common stock is $1.00 par value. The preffered stock has a $100 par value, a 5% dividend rate, and is noncumulative. On October 31, 2015, the company declares dividends of $0.25 per share for common. Provide the journal entry for the declaration of dividends.

Organic Produce Corporation has 7.5 million shares of common stock outstanding, 500,000 shares of 7% preferred...

Organic Produce Corporation has 7.5 million shares of common stock outstanding, 500,000 shares of 7% preferred stock outstanding, and 175,000 of 8.2% semiannual bonds outstanding, par value of $1,000 each. The common stock currently sells for $64 per share and has a beta of 1.2, the preferred stock currently sells for $108 per share, and the bonds have 15 years to maturity and sell for 96% of par. The market risk premium is 6.8%, T-Bills are yielding 5.5%, and the...

Question

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

Solutions

Expert Solution

Related Solutions

Spicer Reports Corp has 400,000 shares of common stock outstanding, 200,000 shares of preferred stock outstanding,...

Sports Corp has 11.8 million shares of common stock outstanding, 6.8 million shares of preferred stock...

(WACC) A company has common stock, preferred shares, and debt outstanding. As of today, the common...

(WACC) A company has common stock, preferred shares, and debt outstanding. As of today, the common...

Riverbed Company has outstanding 2,700 shares of $100 par, 7% preferred stock and 14,200 shares of...

Bonita Company has outstanding 2,600 shares of $100 par, 7% preferred stock and 16,400 shares of...

Empire Today Inc. has 10 million shares of common stock outstanding, 300,000 shares of 5% preferred...

Empire Today Inc. has 10 million shares of common stock outstanding, 300,000 shares of 5% preferred...

Pealand Company has 50,000 shares of common stock outstanding and 2,000 shares of preferred stock outstanding....

Organic Produce Corporation has 7.5 million shares of common stock outstanding, 500,000 shares of 7% preferred...