Caspian Sea Drinks' is financed with 62.00% equity and the remainder in debt. They have 11.00-year, semi-annual pay, 5.45% coupon bonds which sell for 98.43% of par. Their stock currently has a market value of $25.74 and Mr. Bensen believes the market estimates that dividends will grow at 3.24% forever. Next year’s dividend is projected to be $2.93. Assuming a marginal tax rate of 23.00%, what is their WACC (weighted average cost of capital)?

Caspian Sea Drinks' is financed with 62.00% equity and the remainder in debt. They have 11.00-year, semi-annual pay, 5.45% coupon bonds which sell for 98.43% of par. Their stock currently has a market value of $25.74 and Mr. Bensen believes the market estimates that dividends will grow at 3.24% forever. Next year’s dividend is projected to be $2.93. Assuming a marginal tax rate of 23.00%, what is their WACC (weighted average cost of capital)?

Name: Caspian Sea Drinks' is financed with 62.00% equity and the remainder i
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Description: Caspian Sea Drinks' is financed with 62.00% equity and the remainder in debt. They have 11.00-year, semi-annual pay, 5.45% coupon bonds which sell for 98.43% of par. Their stock currently has a market value of $25.74 and Mr. Bensen believes the marke

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter9: The Cost Of Capital

Section: Chapter Questions

Problem 5P

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