Question: Hollydale's will issue an additional 6,000 bomds with the help of an investment banker. The homds will be semianuual bonds with a maturity of 28

 Hollydale's will issue an additional 6,000 bomds with the help of
an investment banker. The homds will be semianuual bonds with a maturity
Hollydale's will issue an additional 6,000 bomds with the help of an investment banker. The homds will be semianuual bonds with a maturity of 28 years. The coupon code rate will be 10%, and the par value $1,000. These bonds will be sold at $1,026.98 in the market, but the investment banker will receive a 7% commission on thr sold bonds. The original bonds have 13 years to maturity and are semiannual, with a coupon rate of 8.5% and a price of $1,039.96. There are 19,000 bonds outstanding crom this senior issue. What is the new cost of capital for Hollydale's if the company still has 540,000 shares outstanding selling at $26.64 with an annual dividend growth rate of 5.0% and the last annual dividend of $2.10? The tax rate remains at 30%.
What is the adjusted WACC for Hollydale's if the corporate tax rate is 30%?

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