Find weighted average cost of capital - yield to maturity, Corporate Finance

Monsanto Company has 3 million shares, selling at $25 each. The company has just paid a dividend of $1.35 and the next year's dividend is expected to be $1.50, which is in line with its long-term growth rate. Monsanto has $50 million (face amount) of bonds, maturing in 10 years, with coupon 8%. The yield to maturity for the bonds is 10%.  The income tax rate of the company is 30%. Find its WACC.

Answer: 13.38%

Posted Date: 3/8/2013 5:14:51 AM | Location : United States







Related Discussions:- Find weighted average cost of capital - yield to maturity, Assignment Help, Ask Question on Find weighted average cost of capital - yield to maturity, Get Answer, Expert's Help, Find weighted average cost of capital - yield to maturity Discussions

Write discussion on Find weighted average cost of capital - yield to maturity
Your posts are moderated
Related Questions
5. Produce a cash budget and determine the statement of external financing required for NSP Inc. for the months of December and January using the following information: • NSP Inc.

A owns all of the stock of X.  The stock's basis is $100.  X has a total of current and accumulated earnings and profits of $50.  X distributes $200 cash to A "with respect to his

Professor Steward Hamilton wrote a case on the Enron collapse. He stated that when Enron failed and filed for bankruptcy protection on December 2001, the entair world came to a sh

Financial Modelling Read carefully the case notes overleaf. Factor models on explaining firm's returns in a credit risk context. Is the usual one-factor model good enough?

The managing directors of three profitable listed companies discussed their company’s dividend policies at a business lunch. Company A has deliberately paid no dividends for the p

Two years ago, Homeless People Ltd needed to accumulate a total of $600,000 by the end of four years to acquire new facility to house the homeless people in the city.  To do so, Ho

Roman Roads has a number of capital projects available for investment this year but has access to a limited amount of capital.  Specifically, the firm has arranged to secure a $25

#Minimum 100 words accepted#

Question : (a) What are the three broad categories of buyers and sellers in the financial markets? (b) Differentiate between the primary and the secondary financial marke

Market-Adjusted and Two-Factor Models - Event Study As mentioned previously, you can use several alternative models to calculate a security's expected return. The market-adjus