Question: PLEASE SHOW WORK ON EXCEL ONLY. THANK YOU The Saunders Investment Bank has the following financing outstanding. Debt: 57,000 bonds with a coupon rate of

 PLEASE SHOW WORK ON EXCEL ONLY. THANK YOU The Saunders Investment

PLEASE SHOW WORK ON EXCEL ONLY. THANK YOU

The Saunders Investment Bank has the following financing outstanding. Debt: 57,000 bonds with a coupon rate of 5.3 percent and a current price quote of 106.9; the bonds have 12 years to maturity and a par value of $1,000. 18,300 zero coupon bonds with a price quote of 25.3, 29 years until maturity, and a par value of $10,000. Both bonds have semiannual compounding. Preferred 152,000 shares of 3.2 percent preferred stock with a current price of stock: $87 and a par value of $100. Common stock: 2,240,000 shares of common stock; the current price is $89 and the beta of the stock is 1.05. Market: The corporate tax rate is 22 percent, the market risk premium is 73 percent, and the risk-free rate is 3.2 percent. What is the WACC for the company? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) WACC %

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!