Reference no: EM133506661
Case Study: The latest annual reports and market data provides the following information regarding the currentfinancial structure of Golden Barrel Distillery:Corporate bank loan with a $34,700,000 principal amount. The loan requires end of fortnightrepayments of $139,226.28 over the next 13 years, with interest compounding fortnightly.Unsecured notes offering investors a 5.6% per annum coupon rate, paid semi-annually. The 62,500outstanding unsecured notes mature in 9 years, exhibit traditional $1,000 face values, and arecurrently trading for $987 each.Debentures maturing in 17 years with $1,000 denominations, trading for $1,026 each. The 248,000outstanding debentures pay bondholders annually, based on a 6.3% per annum coupon rate.Cumulative Class A preferred stock trading for $21.58 each, with 920,000 outstanding in total.These preferred stocks have a stated annual dividend of $1.75 per share.Cumulative Class B preferred stock trading for $89.74 each, with 525,000 outstanding in total.These preferred stocks have a current dividend of $3.29 per share, which are indexed annually withthe Reserve Bank of Australia's medium-term inflation target.Common stock trading for $13.27 each, with 40,000,000 outstanding in total. Golden BarrelDistillery has seen an average growth of 11% per annum over the past few years due to growingdemand for Australian made whisky. This growth is expected to continue for the next three years,fall to 8% per annum for the following two years, before stabilising at a more moderate 5% to 6%per annum thereafter. The company directors have just paid a dividend of $0.94 per share for thelast 12 months.Golden Barrel Distillery is registered in Australia and is subject to a 30% corporate tax rate. The Australianeconomy is currently experiencing higher than desired levels of inflation. The Reserve Bank of Australiahas recently stated they expect inflation to decline in the near future and remain stable at roughly 4% perannum. This forecasted change in inflation is still above the bank's 3% per annum medium-term inflationtarget, highlighting the perceived difficulties in curbing current inflation.
Question: What is Golden Barrel Distillery's weighted average cost of capital (WACC)?
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