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Business, 06.12.2019 02:31 ignacio73

You are given the following information concerning parrothead enterprises: debt: 9,000 6.2 percent coupon bonds outstanding, with 20 years to maturity and a quoted price of 104. these bonds pay interest semiannually. common stock: 225,000 shares of common stock selling for $64.50 per share. the stock has a beta of 0.85 and will pay a dividend of $2.70 next year. the dividend is expected to grow by 5 percent per year indefinitely. preferred stock: 8,000 shares of 4.5 percent preferred stock selling at $94 per share. market: a 12 percent expected return, a 5 percent risk-free rate, and a 35 percent tax rate.
required:
calculate the wacc for parrothead enterprises

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