Question: i need somw help in solving the question, i am trying to find the weighted average cost 1. A company's recent bond issue of $10,000
1. A company's recent bond issue of $10,000 face value, 7% coupon bonds are selling at a significant discount, which has pushed up their YTM to 11%. The most recent dividend on their stock was $4.75/ share. The historic growth rate for the company's dividends is 3%. The shares sell for $62/ share. Finally, Toronto Dominion Bank has recently provided a ten-month, $11 million loan to the company at an interest rate of 8.25%. Based on this representative (annualized) data, and given that the company maintains a debt-to-equity ratio of .60, with half the debt being bonds and the rest being loans, what is the company's WACC
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
