Question: please help witn #1 and #2 please!!!! 1. Determine the capital structure (market value weights to two decimal places) for the Boil-in-Oil French Fry Company
1. Determine the capital structure (market value weights to two decimal places) for the Boil-in-Oil French Fry Company that has the following securities: a Bank Loan: The company states that it currently has a newly issued $18 million bank loan at a rate of prime +2.75%. b. Debt: The company has two bond issues. The first bond matures in 5 years, has an 8% coupon with a face value of $40 million and a yield to maturity of 7.5%. The second bond has a face value of $65 million, a 4% coupon, matures in 8 years and has a yield to maturity of 6.0%. c. Preferred Stock: The company's preferred stock has a book value of $25 per share but sells for $65 per share. There are 1.4 million shares outstanding d. Common Equity: The company's common stock sells for $50 per share. There are 11 million shares outstanding. 2. The market value of Aardvark Corp. as of December 31, 2020 was $750 million. The firm's current capital market structure is on target and is as follows: Debt Preferred Stock: Common Stock: $150 mil $50 mil $550 mil Using data in the Wall St. Journal, the company's bonds are calculated to have a nominal yield to maturity of 3.5%. The company's preferred stock sells for $100 per share and pays an annual dividend of $7.00 per share. The company's common stock sells for $80 per share and is expected to pay a dividend of $10 per share by the end of this year (i.e. Div =$10.00). The dividend is expected to grow at a constant rate of 6% a year. The yield on Treasury Bills is 4.9% while the market risk premium is believed to be 8%. Aardvark is an aggressive stock with a Beta of 1.7. The company's tax rate is 21% Compute the market value weights, each component cost of capital and the Weighted Average Cost of Capital (WACC) to two decimal places
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