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    darronusherjr's Avatar
    darronusherjr Posts: 4, Reputation: 1
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    #1

    Mar 1, 2016, 01:20 PM
    Accounting WACC and Stocks
    ) Given the following information for Last Question Inc. Assume the corporate tax rate is 35%, 7% market risk premium and 4.5% risk free rate.

    Debt 8,000 6% coupon bonds outstanding, $1,000 par, 20 years to maturity, recently quoted at 106. The bonds make semi annual payments

    Common Stock 210,000 shares outstanding, selling for $57 per share. The companies beta is 1.05 and they just paid a dividend of $1.02 which is consistent with their dividend growth target of 5%.

    Preferred stock 15,000 shares of 4 percent preferred stock ($100 par) outstanding currently selling for $72 per share (5 points)







    a). What is the WACC for Last Question Inc?




    b) If the company did a 3-for-2 stock split of common shares, what would be the post split price and new number of shares?




    c) If the company was to issue new preferred shares ($100 par), what would the dividend have to be based on current market conditions?
    paraclete's Avatar
    paraclete Posts: 2,706, Reputation: 173
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    #2

    Mar 1, 2016, 01:32 PM
    Do your own assignments
    darronusherjr's Avatar
    darronusherjr Posts: 4, Reputation: 1
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    #3

    Mar 1, 2016, 01:40 PM
    Quote Originally Posted by paraclete View Post
    Do your own assignments
    I need assistance with this question.
    Cat1864's Avatar
    Cat1864 Posts: 8,007, Reputation: 3687
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    #4

    Mar 1, 2016, 01:57 PM
    Please explain what assistance you need with this and other questions you have posted.

    I note that each question is worth 5 points. Are they from a test or quiz?
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