A company has a current share price of $44 and a total of 19 million shares outstanding. The company currently has debt with a total present value of $885 million.  These outstanding bonds are currently priced to yield 4.9% while quoting at 88.5% of total face value.  The company recently paid a dividend to common stock holders of $4.08 and anticipates growing the dividend at a constant rate of 6% per year indefinitely.  If the corporate tax rate is 30%, what is the weight(percent) of equity of Some Company?

Answer rating: 100% (QA)

How to calculate the weight of equity percent of Some Company 1 Calculate the cost of debt The bond yield is 49but we need to adjust it for the fact t... View the full answer