Sharify Inc uses bond, common, and preferred shares to finance their operations. 1,000 bonds with a 6.5% semi-annual coupon rate, the bond is priced to have a YTM of 6% (semi-annually compounded APR) with 6 years left to maturity. 39,000 shares of common stock with a market value of $65 per share. The beta for Sharify Inc. common stock is 1.8. 5,000 shares of preferred stock that have a 7% dividend yield. The shares have a market value of $49 per share, and a face value of $100. Suppose the average return on a 10-year Canadian government bond is 3.9%, and the return on the TSX Composite Index i 9.3%. What is the current price of the bond? What is Sharify Inc.'s WACC? Assume the tax rate is 32 %
Sharify Inc uses bond, common, and preferred shares to finance their operations. 1,000 bonds with a 6.5% semi-annual coupon rate, the bond is priced to have a YTM of 6% (semi-annually compounded APR) with 6 years left to maturity. 39,000 shares of common stock with a market value of $65 per share. The beta for Sharify Inc. common stock is 1.8. 5,000 shares of preferred stock that have a 7% dividend yield. The shares have a market value of $49 per share, and a face value of $100. Suppose the average return on a 10-year Canadian government bond is 3.9%, and the return on the TSX Composite Index i 9.3%. What is the current price of the bond? What is Sharify Inc.'s WACC? Assume the tax rate is 32 %
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter20: Hybrid Financing: Preferred Stock, Warrants, And Convertibles
Section: Chapter Questions
Problem 1P: Neubert Enterprises recently issued $1,000 par value 15-year bonds with a 5% coupon paid annually...
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