Question: Please complete the following problems in class on 10/29/20 and upload in Canvas by noon on 10/30/20. Complete all work in Excel with a different
Please complete the following problems in class on 10/29/20 and upload in Canvas by noon on 10/30/20. Complete all work in Excel with a different problem on each tab and each tab labelled. Each problem worth 10 points
Firm A has a tax rate = 25%; 20-year, 8% coupon, semiannual payment noncallable bonds selling for $900; 10%, $100 par value, quarterly dividend, perpetual preferred stock sells for $94; Common stock sells for $30 with D0 = $2 and g = 4%; the firm has beta = 1.2; rRF = 7%; RPM = 6%; the Bond-Yield Risk Premium = 5% and the target capital structure: 40% debt, 5% preferred, 55% common equity. What is the WACC?
Firm B has a tax rate = 35%; 20-year, 8% coupon, semiannual payment noncallable bonds selling for $900; 10%, $100 par value, quarterly dividend, perpetual preferred stock sells for $94; Common stock sells for $30 with D0 = $2 and g = 4%; the firm has beta = 1.2; rRF = 7%; RPM = 6%; the Bond-Yield Risk Premium = 5% and there are 1,000 bonds, 100 preferred shares, and 35,000 common equity shares. What is the WACC?
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