Ordinary shares pay a dividend of 68 cents per year, and are expected to pay the same dividend amount indefinitely. Comm
Posted: Sun May 29, 2022 6:29 pm
Ordinary shares pay a dividend of 68 cents per year, and are
expected to pay the same dividend amount indefinitely. Commonwealth
government bonds trade at 5%.The return on the market portfolio is
13%. Pippin Ltd’s beta is 1.5. Its bonds are priced at $106. The
current return on Pippin Ltd debentures is 2% above the government
bond rate. No company or personal taxes are levied. What is the
WACC? a. 13.94% b. 2.78% c. 5.89% d. 7.90%
Show working out
expected to pay the same dividend amount indefinitely. Commonwealth
government bonds trade at 5%.The return on the market portfolio is
13%. Pippin Ltd’s beta is 1.5. Its bonds are priced at $106. The
current return on Pippin Ltd debentures is 2% above the government
bond rate. No company or personal taxes are levied. What is the
WACC? a. 13.94% b. 2.78% c. 5.89% d. 7.90%
Show working out