Corporate Finance Assignment/ Professional Essay Writers
Dinklage Corp. has 7 million shares of common stock outstanding. The current share price is $79, and the book value per share is $6.
The company also has two bond issues outstanding. The first bond issue has a face value of $70 million, a yield to maturity of 8.60 percent, and sells for 94 percent of par. The second issue has a face value of $40 million, a yield to maturity of 7.53 percent, and sells for 107 percent of par. The first issue matures in 23 years, the second in 6 years.
Suppose the most recent annual dividend was $5.10 and the annual dividend growth rate is 9 percent. The tax rate is 34 percent. Calculate the company’s WACC.
Start by calculating the firm’s market value.
(Enter your answer as a dollar amount, not millions of dollars, i.e. enter one million as 1,000,000)
What is the Firm’s Market Value? (debt & equity)
What is the Cost of Equity?
What is the After-tax Cost of Debt? %
Now calculate the WACC.
(Don’t round your intermediate steps and enter your answer as a percent rounded to two decimals.)
What is the WACC? %. Get Finance Help Today