Cullumber Industries has 8 percent coupon bonds outstanding. These bonds have a market price of $954.41, pay interest semiannually, and will mature in six years. The tax rate is 35 percent. The common stock of Cullumber Industries has a beta of 1.6 and the market risk-free rate is 4 percent and the expected return on the market is 9 percent. In addition to common stock, Cullumber has 500,000 preferred shares outstanding that pay a quarterly dividend of $0.40 per share and are currently trading for $20.00 a share. The company's outstanding bonds have a face value of $249,368,720. There are 2.5 million shares of common stock outstanding with a current market price of $98.00 per share. Compute the WACC for Cullumber Industries. (Round intermediate calculation to 4 decimal places, eg. 15.1253 and round final answer to 2 decimal places, e.g. 15.25%) WACC %

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Cullumber Industries has 8 percent coupon bonds outstanding. These bonds have a market price of $954.41, pay interest
semiannually, and will mature in six years. The tax rate is 35 percent. The common stock of Cullumber Industries has a beta of 1.6 and
the market risk-free rate is 4 percent and the expected return on the market is 9 percent.
In addition to common stock, Cullumber has 500,000 preferred shares outstanding that pay a quarterly dividend of $0.40 per share
and are currently trading for $20.00 a share. The company's outstanding bonds have a face value of $249,368,720. There are 2.5
million shares of common stock outstanding with a current market price of $98.00 per share.
Compute the WACC for Cullumber Industries. (Round intermediate calculation to 4 decimal places, e.g. 15.1253 and round final answer to
2 decimal places, e.g. 15.25%)
WACC
Transcribed Image Text:Cullumber Industries has 8 percent coupon bonds outstanding. These bonds have a market price of $954.41, pay interest semiannually, and will mature in six years. The tax rate is 35 percent. The common stock of Cullumber Industries has a beta of 1.6 and the market risk-free rate is 4 percent and the expected return on the market is 9 percent. In addition to common stock, Cullumber has 500,000 preferred shares outstanding that pay a quarterly dividend of $0.40 per share and are currently trading for $20.00 a share. The company's outstanding bonds have a face value of $249,368,720. There are 2.5 million shares of common stock outstanding with a current market price of $98.00 per share. Compute the WACC for Cullumber Industries. (Round intermediate calculation to 4 decimal places, e.g. 15.1253 and round final answer to 2 decimal places, e.g. 15.25%) WACC
please, i need help. i put these two
answers but they are wrong. 8.95 %
and 8.56% are both wrong. im on my
last attempt.
Transcribed Image Text:please, i need help. i put these two answers but they are wrong. 8.95 % and 8.56% are both wrong. im on my last attempt.
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