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 %
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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Transcribed Image Text: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 is
9.3%. What is the current price of the bond? What is Sharify Inc.'s WACC? Assume the tax rate is 32 %.
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