What is the wacc for the calgary company

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Reference no: EM132911466

Calgary Company has:

Debt: 90,000 bonds with a coupon rate of 12% and a current price quote of 114; the bonds have 20 years to maturity. 260,000 zero coupon bonds with a price quote of 19 and 30 years until maturity. Both bonds have a par value of $1,000. Assume semiannual compounding.

Preferred Stock: 180,000 shares of 10 percent preferred stock with a current price of $73, and a par value of $100.

Common Stock: 2,900,000 shares of common stock; the current price is $59, and the beta of the stock is 1.2.

Market: The corporate tax rate is 35%, the market risk premium is 6 percent, and the risk-free rate is 3 percent.

Problem 1: What is the WACC for the company?

Reference no: EM132911466

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