You are given the following information on Parrothead Enterprises: Debt: Common stock: Preferred stock: Market: 9,600 7.1 percent coupon bonds outstanding, with 24 years to maturity and a quoted price of 105.5. These bonds pay interest semiannually and have a par value of $1,000. 255,000 shares of common stock selling for $65.10 per share. The stock has a beta of .96 and will pay a dividend of $3.30 next year. The dividend is expected to grow by 5.1 percent per year indefinitely. 8,600 shares of 4.55 percent preferred stock selling at $94.60 per share. The par value is $100 per share. 11.4 percent expected return, risk-free rate of 3.9 percent, and a 21 percent tax rate. Calculate the company's WACC. Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal p WACC %
You are given the following information on Parrothead Enterprises: Debt: Common stock: Preferred stock: Market: 9,600 7.1 percent coupon bonds outstanding, with 24 years to maturity and a quoted price of 105.5. These bonds pay interest semiannually and have a par value of $1,000. 255,000 shares of common stock selling for $65.10 per share. The stock has a beta of .96 and will pay a dividend of $3.30 next year. The dividend is expected to grow by 5.1 percent per year indefinitely. 8,600 shares of 4.55 percent preferred stock selling at $94.60 per share. The par value is $100 per share. 11.4 percent expected return, risk-free rate of 3.9 percent, and a 21 percent tax rate. Calculate the company's WACC. Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal p WACC %
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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Question
You are given the following information on Parrothead Enterprises: Debt: Common stock: Preferred stock: 9,600 7.1 percent coupon bonds outstanding, with 24 years to maturity and a quoted price of 105.5 . These bonds pay interest semiannually and have a par value of $1,000. 255,000 shares of common stock selling for $65.10 per share. The stock has a beta of .96 and will pay a dividend of $3.30 next year. The dividend is expected to grow by 5.1 percent per year indefinitely. Market: 8,600 shares of 4.55 percent preferred stock selling at $94.60 per share. The par value is $100 per share. 11.4 percent expected return, risk-free rate of 3.9 percent, and a 21 percent tax rate. Calculate the company's WACC. Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal
Transcribed Image Text:You are given the following information on Parrothead Enterprises:
Debt:
Common stock:
Preferred stock:
Market:
9,600 7.1 percent coupon bonds outstanding, with 24 years to maturity and a
quoted price of 105.5. These bonds pay interest semiannually and have a par
value of $1,000.
255,000 shares of common stock selling for $65.10 per share. The stock has a
beta of .96 and will pay a dividend of $3.30 next year. The dividend is
expected to grow by 5.1 percent per year indefinitely.
8,600 shares of 4.55 percent preferred stock selling at $94.60 per share. The
par value is $100 per share.
11.4 percent expected return, risk-free rate of 3.9 percent, and a 21 percent
tax rate.
Calculate the company's WACC.
Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal p
WACC
%
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