Question: Information on Zero Co . , is shown below. Assume the company's tax rate is 2 3 percent. Debt: 1 6 , 8 0 0

Information on Zero Co., is shown below. Assume the company's tax rate is 23 percent.
Debt: 16,8005.9 percent coupon bonds outstanding, $1,000 par value, 25 years to maturity, selling for 106.4 percent of par; the bonds make semiannual payments.
Common stock: 550,000 shares outstanding, selling for $81.75 per share; beta is 1.15.
Preferred stock: 21,500 shares of 4.15 percent preferred stock outstanding, currently selling for $91.30 per share. The par value is $100.
Market: 6.4 percent market risk premium and 2.9 percent risk-free rate.
What is the company's WACC?
2. One-One Corporation has 6.4 million shares of common stock outstanding, 320,000 shares of 4.65 percent preferred stock outstanding, par value of $100, and 73,0005.6 percent semiannual bonds outstanding, par value $2,000 each. The common stock currently sells for $74.25 per share and has a beta of 1.14, the preferred stock currently sells for $101.60 per share, and the bonds have 23 years to maturity and sell for 96.1 percent of par. The market risk premium is 6.8 percent, T-bills are yielding 3.4 percent, and the firm's tax rate is 25 percent.
What is the company's WACC?
3. Please see below for Two-Two Corporation's information.
Debt: 9,7007.2 percent coupon bonds outstanding, with 23 years to maturity and a quoted price of 105.75. These bonds have a par value of $1,000 and pay interest semiannually.
Common stock: 260,000 shares of common stock selling for $65.20 per share. The stock has a beta of 97 and will pay a dividend of $3.40 next year. The dividend is expected to grow by 5.2 percent per year indefinitely.
Preferred stock: 8,700 shares of 4.60 percent preferred stock selling at $94.70 per share.
Market: 11.3 percent expected return, a risk-free rate of 3.95 percent, and a 22 percent tax rate.
What is the company's WACC?
 Information on Zero Co., is shown below. Assume the company's tax

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!