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You are given the following information concerning Parrothead Enterprises Debt 9 800 73 percent coupon bonds outstanding with 22 years to maturity and a quoted price of 106 These bonds pay

You are given the following information concerning Parrothead Enterprises: Debt: 9, 800 7.3 percent coupon bonds outstanding, with 22 years to maturity and a quoted price of 106. These bonds pay interest semiannually. Common stock: 265,000 shares of common stock selling for $65.30 per share. The stock has a beta of .93 and will pay a dividend of $3.50 next year. The dividend is expected to grow by 5.3 percent per year indefinitely. Preferred stock: 8, 800 shares of 4.65 percent preferred stock selling at $94.80 per share. Market: An expected return of 11.2 percent, a risk-free rate of 5.15 percent, and a 38 percent tax rate. Calculate the WACC for Parrothead Enterprises. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) WACC %

 

Apr 05 2020 View more View Less

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