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Business, 23.08.2020 01:01 levilugar

You are given the following information on Parrothead Enterprises: Debt: 9,200 6.4 percent coupon bonds outstanding, with 23 years to maturity and a quoted price of 104.5. These bonds pay interest semi-annually and have a par value of $1,000. Common stock: 235,000 shares of common stock selling for $64.70 per share. The stock has a beta of .92 and will pay a dividend of $2.90 next year. The dividend is expected to grow by 5.2 percent per year indefinitely. Preferred stock: 8,200 shares of 4.6 percent preferred stock selling at $94.20 per share. The par value is $100 per share. Market: 11.8 percent expected return, risk-free rate of 3.7 percent, and a 22 percent tax rate. Calculate the company's WACC.

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