Dinklage corp. has 7 million shares of common stock outstanding. the current share price is $68, and the book value per share is $8. the company also has two bond issues outstanding. the first bond issue has a face value of $70 million, a coupon rate of 6 percent, and sells for 97 percent of par. the second issue has a face value of $40 million, a coupon rate of 6.5 percent, and sells for 108 percent of par. the first issue matures in 21 years, the second in 6 years. suppose the most recent dividend was $3.25 and the dividend growth rate is 5 percent. assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. both bonds make semiannual payments. the tax rate is 21 percent. what is the company’s wacc? (do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e. g., 32.16.)
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Business, 22.06.2019 06:40
Burke enterprises is considering a machine costing $30 billion that will result in initial after-tax cash savings of $3.7 billion at the end of the first year, and these savings will grow at a rate of 2 percent per year for 11 years. after 11 years, the company can sell the parts for $5 billion. burke has a target debt/equity ratio of 1.2, a beta of 1.79. you estimate that the return on the market is 7.5% and t-bills are currently yielding 2.5%. burke has two issuances of bonds outstanding. the first has 200,000 bonds trading at 98% of par, with coupons of 5%, face of $1000, and maturity of 5 years. the second has 500,000 bonds trading at par, with coupons of 7.5%, face of $1000, and maturity of 12 years. kate, the ceo, usually applies an adjustment factor to the discount rate of +2 for such highly innovative projects. should the company take on the project?
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Business, 22.06.2019 19:30
One of the benefits of a well designed ergonomic work environment is low operating costs is true or false
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Dinklage corp. has 7 million shares of common stock outstanding. the current share price is $68, and...
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