Company 3 is financed with debt, preference capital and ordinary equity, for which the following details are available,

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Company 3 Is Financed With Debt Preference Capital And Ordinary Equity For Which The Following Details Are Available 1 (65.45 KiB) Viewed 12 times

Company 3 is financed with debt, preference capital and ordinary equity, for which the following details are available, assume 20% tax rate: Debt: The firm has 1,400 corporate bonds on issue, each with a face value of $1,000 and a mature after 4 years. The coupon rate of 5% per annum, and the current yield to maturity is 5% per annum. Preference Capital: There are 360,000 preference shares on issue. The current preference share price is $74, and it pays annual preference dividends of $16. Ordinary Capital: 1,550,000 ordinary shares are on issue. The current ordinary share price is $66 per share, the share beta is 1.4, the market risk premium is 12%, and the risk free rate of return is 5%, Find WACC.