Jagannath Aeronauticals Ltd (JAL) has 10 million shares of common stock outstanding, 2 million shares of...

  

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Jagannath Aeronauticals Ltd (JAL) has 10 million shares of common stock outstanding, 2 million shares of 5 percent preferred outstanding, and 250,000 $1,000 par, 10 percent semiannual coupon bonds outstanding. The stock sells for $45 per share and has a beta of 1.4, the preferred stock sells for $50 per share, and the bonds have 10 years to maturity and sell for 90 percent of par. The market return as proxied by S&P 500 returns are 11 percent, T-bills are yielding 5 percent, and the firm's tax rate is 30 74014-82 percent. What is JAL's WACC? 14-826 30 [8] 74014-82671- Jagannath Aeronauticals Ltd (JAL) has 10 million shares of common stock outstanding, 2 million shares of 5 percent preferred outstanding, and 250,000 $1,000 par, 10 percent semiannual coupon bonds outstanding. The stock sells for $45 per share and has a beta of 1.4, the preferred stock sells for $50 per share, and the bonds have 10 years to maturity and sell for 90 percent of par. The market return as proxied by S&P 500 returns are 11 percent, T-bills are yielding 5 percent, and the firm's tax rate is 30 74014-82 percent. What is JAL's WACC? 14-826 30 [8] 74014-82671-

Answer rating: 100% (QA)

To work out JALs weighted normal expense of capital WACC we want to decide the weightings of every part of its capital design and the relating cost of ... View the full answer