Metallica Ltd. has 10 million ordinary shares outstanding; 300,000, $100 par value, 6 percent preferred shares;...
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Metallica Ltd. has 10 million ordinary shares outstanding; 300,000, $100 par value, 6 percent preferred shares; and 40,000, $1,000 par (face) value bonds with semi-annual coupon payments of $40 per bond. Metallica's ordinary shares currently sell for $5.50 each and have a beta (B) of 1.3. The preferred shares have a current market value of $80 per share. The bonds have 7 years to maturity and sell for 90 per cent of their par (face) value. The risk free rate of interest is 7 percent; the market risk premium is 8 percent and Metallica's income tax rate is 30 percent. Required Find Metallica's weighted average cost of capital (WACC) Metallica Ltd. has 10 million ordinary shares outstanding; 300,000, $100 par value, 6 percent preferred shares; and 40,000, $1,000 par (face) value bonds with semi-annual coupon payments of $40 per bond. Metallica's ordinary shares currently sell for $5.50 each and have a beta (B) of 1.3. The preferred shares have a current market value of $80 per share. The bonds have 7 years to maturity and sell for 90 per cent of their par (face) value. The risk free rate of interest is 7 percent; the market risk premium is 8 percent and Metallica's income tax rate is 30 percent. Required Find Metallica's weighted average cost of capital (WACC)
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