Adjusted WACC. Hollydale's will issue an additional 7,000 bonds with the help of an investment banker....

Transcribed Image Text:

Adjusted WACC. Hollydale's will issue an additional 7,000 bonds with the help of an investment banker. The bonds will be semiannual bonds with a maturity of 22 years. The coupon rate will be 8.5%, and the par value $1,000. These bonds will be sold at $777.44 in the market, but the investment banker will receive a 6% commission on the sold bonds. The original bonds have 14 years to maturity and are semiannual, with a coupon rate of 6.5% and a price of $955.83. There are 13,000 bonds outstanding from this senior issue. What is the new cost of capital for Hollydale's if the company still has 460,000 shares outstanding selling at $17.49 with an annual dividend growth rate of 2.0% and the last annual dividend of $2.60? The tax rate remains at 20%. What is the adjusted WACC for Hollydale's if the corporate tax rate is 20%? % (Round to two decimal places.) Adjusted WACC. Hollydale's will issue an additional 7,000 bonds with the help of an investment banker. The bonds will be semiannual bonds with a maturity of 22 years. The coupon rate will be 8.5%, and the par value $1,000. These bonds will be sold at $777.44 in the market, but the investment banker will receive a 6% commission on the sold bonds. The original bonds have 14 years to maturity and are semiannual, with a coupon rate of 6.5% and a price of $955.83. There are 13,000 bonds outstanding from this senior issue. What is the new cost of capital for Hollydale's if the company still has 460,000 shares outstanding selling at $17.49 with an annual dividend growth rate of 2.0% and the last annual dividend of $2.60? The tax rate remains at 20%. What is the adjusted WACC for Hollydale's if the corporate tax rate is 20%? % (Round to two decimal places.)