What is the wacc-seahawk incorporated

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Seahawk Incorporated is expected to have an EBIT of $2.2 million next year. Depreciation, the increase in net working capital, and capital spending are expected to be $165,000, $85,000, and $115,000 respectively. All are expected to grow at 17% per year for four years. The company currently has $12.5 million in debt and 800,000 shares outstanding. After year 5, the adjusted cash flow from assets is expected to grow at 3% annually indefinitely. The debt includes bonds with a face value of $1,000 each, 22 years left to maturity, a coupon of 6.5%, paid semiannually, currently valued at 104 of par. Seahawk pays 30% corporate taxes. Its beta is 1.1. Assume Government of Canada 25 year bonds have an interest rate of 3% and the return on the overall stock market is 8%. Assume the debt to equity ratio is 0.8.

What is the WACC and what is the price per share of the company's stock?

Reference no: EM132675829

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