@& Chrome File Edit View History Bookmarks Profiles Tab Window Help '6 = @) T Q & MonMay13 4:08 [ X ] p2L McGraw Hill Connect b M Question 1 - Week 5 Problem X * Search Results | Course Hero X or = () ezto.mheducation.com/ext/map/index.htm|?_con=con&external_browser=0&laun: rl=https %253A%252F%252Fnewconnect.mheducation.com%252F#/activity/question... Y 3 B R Client Login | Relias Student Handouts.. ( UDEMY @ FinanceIndexM-P @ Financial Formulas... [ All Bookmarks Week 5 Problems @) Saved Help Save & Exit Submit The IPO Investment Bank has the following financing outstanding. Debt: 30,000 bonds with a coupon rate of 6 percent and a current price quote of 20 112; the bonds have 20 years to maturity. 200,000 zero coupon bonds with a points price quote of 21 and 30 years until maturity. Both bonds have a par value of $1,000 and semiannual coupons. Skipped Preferred stock: 120,000 shares of 4 percent preferred stock with a current price of $86, and a par value of $100. s e Common stock: 2,300,000 shares of common stock; the current price is $72, and the beta of Hint the stock is 1.5. Print Market: The corporate tax rate is 22 percent, the market risk premium is 8 percent, Rfaranias and the risk-free rate is 5 percent. What is the WACC for the company? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) WACC % Chrome File Edit View History Bookmarks Profiles Tab Window Help SO ~ Q 1 Mon May 13 4:09 O D2L McGraw Hill Connect M Question 3 - Week 5 Problem x Search Results | Course Hero X - G 20 ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/activity/question... N R Client Login | Relias Student Handouts... UDEMY Finance Index M - P Financial Formulas... All Bookmarks Week 5 Problems i Saved Help Save & Exit Submit Check my work 3 You are given the following information for Tara Ita Power Co. Assume the company's tax rate is 21 percent. 20 Debt: 10,000 6.5 percent coupon bonds outstanding, $1,000 par value, 30 points years to maturity, selling for 108 percent of par; the bonds make semiannual payments. Skipped Common stock:370,000 shares outstanding, selling for $55 per share; the beta is 1.11. eBook Market: 6 percent market risk premium and 4.5 percent risk-free rate. Print What is the company's WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) References WACC % Mc Graw < Prev. 3 of 5 Next > Hill 65 6 MAY 13 tv@& Chrome File Edit View History Bookmarks Profiles Tab Window Help '6 - @) 7 S+ Mon May 13 4:09 [ X ] p2L McGraw Hill Connect b M Question 4 - Week 5 Problen X * Search Results | Course Hero X or = () ezto.mheducation.com/ext/map/index.htm|?_con=con&external_browser=0&laun: rl=https %253A%252F%252Fnewconnect.mheducation.com%252F#/activity/question... Y 3 R Client Login | Relias Student Handouts.. ( UDEMY @ FinanceIndexM-P @ Financial Formulas... [ All Bookmarks Week 5 Problems @) Saved Help Save & Exit Submit 4 Butler, Inc., has a target debt-equity ratio of 1.40. Its WACC is 9.5 percent, and the tax rate is 23 percent. 20 a. If the company's cost of equity is 13.3 percent, what is its pretax cost of debt? (Do not points round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Skipped b. If instead you know that the aftertax cost of debt is 5.5 percent, what is the cost of equity? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) eBook Print a. |Pretax cost of debt % References - Cost of equity %