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
What is in store for banking consolidation? A: Merger activity is a natural process by which companies make themselves more efficient and better able to compete for customers.

Question: a) Using illustrative and numerical examples, differentiate between speculation and arbitraging in the context of foreign exchange market. b) One year borrowing

Assignment Part 1   Shareholder Value Provide (a) one page write-up of the company; (b) Present its significant performance indicators such as P/BV; an

You have ten million dollars to allocate across two projects, code named 'Wombat' and 'Marmot.' Both projects are somewhat scalable, in that you could potentially invest as much (u

Question: (a) Describe the essential characteristics of money. (b) Keynes identified three motives for holding balances of money. (i) What are these three motives?

Lott Corporation showed the following balances in its inventory accounts as of January 1: Raw materials inventory $28,800 Work-in-process inventory 36,000 Finished goods i

Suppose that Oxford Inc. is interested in the two new products, AME and CGK. Because of its capital budget constraint, it can only launch one new product line. Eric just graduated

You have just graduated from Stanford''s MBA program and have secured a position as a fund manager for a well known investment banking house. You have been given $300 million to m

considering floatation on the stock exchange, produce a report explaining advantage of such a move

Part A Paris Co. Ltd has Equity Share Capital of Rs 500,000. To meet the expenditure of an expansion programme, the company wishes to raise Rs 300,000 and is having the given