Help to determine market value of the bonds

timer Asked: Oct 16th, 2015

Question description

given the following, find the wacc assuming the company‘s tax rate is 30%.

debt: 8500 bonds, outstanding with a 7.2% coupon, $1000 par value, 25 years to maturity, current market yield is 5,82%, coupons made semi-annually.

Ordinary shares: 225000 shares outstanding, selling for $87 per share, beta is 1.15. Preference shares: paying dividends of 8% of a $100 par value, 15 000 outstanding, currently selling for $98 per share. Other information: market risk premium = 7%, risk-free rate = 3.1%

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