Question: without using excel, with calculations a 4. JNC Ltd. has 11 million shares of common stock outstanding. The current share price is $70, and the
a 4. JNC Ltd. has 11 million shares of common stock outstanding. The current share price is $70, and the book value per share is $30. It also has two bonds outstanding with quarterly payments. The first bond issue has a total face value of $500 million, has a 7 percent coupon rate, and sell for 92 percent of par. The second issue has a total face value of $60 million, has a 8 percent coupon rate, and sells for 105 percent of par. The first issue matures in 21 years, the second one in 6 years. The most recent dividend was $3.50 and the dividend growth rate is 5% forever. The tax rate is 25%. What is the company's cost of equity, cost of debt (weighted-average cost of debt of the two bonds), and weighted average cost of capital? (10 Points)
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