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What is the wacc for johnny cake ltd

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Reference no: EM132506750

Point 1: Johnny Cake Ltd. has 10 million shares of stock outstanding selling at $18 per share and an issue of $50 million in 9 percent annual coupon bonds with a maturity of 18 years, selling at 93.0 percent of par. Assume Johnny Cake's weighted-average tax rate is 34 percent, its next dividend is expected to be $3 per share, and all future dividends are expected to grow at 6 percent per year, indefinitely.

Question 1: What is its WACC?

Reference no: EM132506750

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