Here I Sit Sofas has 5,800 shares of common stock outstanding at a price of $81 per share. There are 630 bonds that mature in 17 years with a coupon rate of 5.5 percent paid semiannually. The bonds have a par value of $1,000 each and sell at 93 percent of par The company also has 4,700 shares of preferred stock outstanding at a price of $34 per share. What is the capital structure weight of the debt?

Here I Sit Sofas has 5,800 shares of common stock outstanding at a price of $81 per share. There are 630 bonds that mature in 17 years with a coupon rate of 5.5 percent paid semiannually. The bonds have a par value of $1,000 each and sell at 93 percent of par The company also has 4,700 shares of preferred stock outstanding at a price of $34 per share. What is the capital structure weight of the debt?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter7: Analysis Of Financial Statements

Section: Chapter Questions

Problem 3P: Winston Watch’s stock price is $75 per share. Winston has $10 billion in total assets. Its balance...

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H3. Filer Manufacturing has 5 million shares of common stock outstanding. The current share price is $84, and the book value per share is $7. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $60 million, has a 7 percent coupon, and sells for 94 percent of par. The second issue has a face value of $35 million, has a 8 percent coupon, and sells for 107 percent of par. The first issue matures in 22 years, the second in 4 years. The most recent dividend was $5.6 and the dividend growth rate is 8 percent. Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 35 percent. Required: What is the company's WACC? 13.25% 7.56% 6.01% 13.57% 6.79% Please show proper step by step calculation
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You are looking at the following information: Debt: Common stock: Preferred stock: Market: 5,000 8.5 percent coupon bonds outstanding, $1,000 par value, 21 years to maturity, selling for 103 percent of par; the bonds make semiannual payments. 110,000 shares outstanding, selling for $62 per share; the beta is 1.2. 16,000 shares of 7.5 percent preferred stock (review my Ch.8 slide 43: what does ...% preferred stock" phrase mean?) outstanding, currently selling for $104 per share. 9.5 percent market risk premium and 7.5 percent risk-free rate. The company is in the 33 percent tax rate bracket based on its corporate income. Required: Find the WACC. (Do not round your intermediate calculations.)
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