Given the following information on Ke-Ma-Gen Ltd., what is its WACC? Retain as many decimal places as possible in your intermediate answers, and round your final answer (in percentage) to two decimal places. Debt: Number of bonds = 6000 Par value = $1000 Coupon rate = 8% (semi-annual coupons) Time to maturity = 10 years Market value = 97.5% of par Common Equity: Number of shares outstanding = 1,000,000 Par value = $1 Price per share = $5.00 Dividends per share = $0.70 Preferred Equity: Number of shares outstanding = 50,000 Price per share = $20 Dividend yield = 5% Other information: Tax rate = 35% Equity beta = 2 Market risk premium = 11% Risk-free rate = 5%
Given the following information on Ke-Ma-Gen Ltd., what is its WACC? Retain as many decimal places as possible in your intermediate answers, and round your final answer (in percentage) to two decimal places. Debt: Number of bonds = 6000 Par value = $1000 Coupon rate = 8% (semi-annual coupons) Time to maturity = 10 years Market value = 97.5% of par Common Equity: Number of shares outstanding = 1,000,000 Par value = $1 Price per share = $5.00 Dividends per share = $0.70 Preferred Equity: Number of shares outstanding = 50,000 Price per share = $20 Dividend yield = 5% Other information: Tax rate = 35% Equity beta = 2 Market risk premium = 11% Risk-free rate = 5%
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A4 7
Given the following information on Ke-Ma-Gen Ltd., what is its WACC? Retain as many decimal places as possible in your intermediate answers, and round your final answer (in percentage) to two decimal places.
Debt:
Number of bonds = 6000
Par value = $1000
Coupon rate = 8% (semi-annual coupons)
Time to maturity = 10 years
Market value = 97.5% of par
Common Equity:
Number of shares outstanding = 1,000,000
Par value = $1
Price per share = $5.00
Dividends per share = $0.70
Preferred Equity:
Number of shares outstanding = 50,000
Price per share = $20
Dividend yield = 5%
Other information:
Tax rate = 35%
Equity beta = 2
Market risk premium = 11%
Risk-free rate = 5%
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