Find weighted average cost of capital - dividends, Corporate Finance

Assignment Help:

Duke Power Corporation has $500 million (face value) of zero-coupon bonds, which will provide 6% return to the bondholders and will mature after 10 years. The stockholders of the company expect a growth rate of 3% in dividends, and a dividend of $3.00 next year. With 30 million shares of common stock outstanding, it is currently selling for $50 a share. Duke Power has a tax rate of 35%. Find its WACC.

Answer: 8.20%


Related Discussions:- Find weighted average cost of capital - dividends

Payback rule, one director asks only for the cash flow figures upto and inc...

one director asks only for the cash flow figures upto and including year 2 and applies a 2-year payback rule

Forecasts based on advance demand information, The case company combines SK...

The case company combines SKUs into product groups and product groups into assortment groups. The methods based on advance demand information (Methods 1-3) can therefore be on a pr

Determine the net present value-discount cash flows, Suppose GeKay Inc. has...

Suppose GeKay Inc. has a two-year lease over a small copper deposit; the government acquires all rights to the property at the end of the lease.  It is known that the deposit conta

Define corporate governance, Problem : (a) Define corporate governance...

Problem : (a) Define corporate governance. (b) Discuss about the Advantages of Corporate Governance. (c) Anlayse the influence relationships among business, government

Compare the forecasting methods, In this section, we will compare the ?ve f...

In this section, we will compare the ?ve forecasting methods using the case study data described in Section 4. Methods 1-3 will ?rst be compared for the full data set (assortment g

Irr calculation, how do you find ldr and HDR for ire?

how do you find ldr and HDR for ire?

Prepare a statement of stockholders equity, On December 31, 2009, the Real ...

On December 31, 2009, the Real Weapons Factory reported total stockholders' equity of $447,200. On that date, total contributed capital was $360,000. During 2009, the firm had tota

What are potential limitations, Problem: "It is simply not really the c...

Problem: "It is simply not really the company's choice who is and is not a stakeholder" (a) Evaluate the above statement in the context of Civil Society Organisations as st

Avalised bill of exchange, Questions: (a) i. Negotiation of letter...

Questions: (a) i. Negotiation of letter of credit- request to confirming Bank to pay upon handing-over and verification of documents in relation to a confirmed letter of

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd