Preferred stock and debt-coupon bonds outstanding

Assignment Help Financial Management

Reference no: EM13944921

You are given the following information concerning Parrothead Enterprises:

Debt: 10,900 7.4 percent coupon bonds outstanding, with 21 years to maturity and a quoted price of 108.75. These bonds pay interest semiannually.

Common stock: 320,000 shares of common stock selling for $66.40 per share. The stock has a beta of 1.05 and will pay a dividend of $4.60 next year. The dividend is expected to grow by 5.4 percent per year indefinitely.

Preferred stock: 9,900 shares of 4.7 percent preferred stock selling at $95.90 per share.

Market: A 10.1 percent expected return, a risk-free rate of 5.4 percent, and a 40 percent tax rate.

Required:

Calculate the WACC for Parrothead Enterprises. (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

WACC %

Reference no: EM13944921

Questions Cloud

Which applications are not well-suited for service model : Which of these applications are well-suited for the minimalist Internet multicast service model? Why

Do you think nature house will be able to sell its plants : What will its cost-plus price be? Do you think Nature House will be able to sell its plants to garden centers at the cost-plus price? Why or why not?

Recommendation for human behaviour : Recommendation for human behaviour and Propose a solution (s) using simple financial pay-back returns to provide a business case for its implementation.

Calculating cost of debt : Drogo, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 23 years to maturity that is quoted at 97 percent of face value. The issue makes semiannual payments and has an embedded cost of 5 percent annually. What..

Preferred stock and debt-coupon bonds outstanding : You are given the following information concerning Parrothead Enterprises: Debt: 10,900 7.4 percent coupon bonds outstanding, with 21 years to maturity and a quoted price of 108.75. These bonds pay interest semiannually. Common stock: 320,000 shares ..

Standard deviation of the sample : The mean hourly wage of bottling plant employees in Nelson County is $16.50 per hour. What is the likelihood that we could select a sample of 40 bottlers with a mean of $16.75 or more? The standard deviation of the sample is $1.75

What are the most important aspects to monitor your servers : We can all agree that it's important to monitor your servers' performance over time. But, what are the most important aspects to monitor and how often? As a network administrator, how do you best use this information for future planning?

Describe an example of the public key infrastructure : Describe an example of the Public Key Infrastructure that would explain the differing usages of symmetric and asymmetric encryption and how these encryption methods might use either a substitution or a transposition cipher.

User Account

All Pages