Wacc Problem 16

Debt Amt of Coupon Bonds 150,000

Par Value 1000

Percentage of Par 6.5%

Common Stock Amt of Shares 8,000,000

Beta 1.25

Cost Per Share 57

Preferred Stock Amt of Shares 400,000

Selling at ____ % 5%

Cost Per Share 78

Market ____% Market Risk Premium RF Rate 8%

5.5%

Calculations

Market Value Debt Common Stock Preferred Stock

150,000.00 8,000,000.00 400,000.00

CAPM

940.00

1.25

### ###

WACC=

0.73 Weight 0.11

Weight2 0

8%

15.5% 0.11 Weight3 1.1270

Debt Selling at ___% of Par Frequency of Payments YTM (In Years) 94% Semi annual 15

Common Stock

Preferred Stock

Market

141,000,000.00 456,000,000.00 31,200,000.00 628,200,000.00 10%

+

15.5%

31,200,000.00 ###

0.05 WACC 1.242

5.5% 0

+

### ###

0.22

0.66 0.1481

### 1.1270