Western Electric has 35,000 ordinary shares outstanding at a price per share of $47 and a rate ofreturn of 13.5%. The firm has 5,000 preference shares paying 7% dividend outstanding at a price of$58 a share. The preferred share has a par value of $100. The outstanding bond has a total face valueof $450,000 and currently sells for 102% of face. The pre-tax yield-to-maturity on the bond is 8.49%.Calculate the total market value of the firm.
Western Electric has 35,000 ordinary shares outstanding at a price per share of $47 and a rate ofreturn of 13.5%. The firm has 5,000 preference shares paying 7% dividend outstanding at a price of$58 a share. The preferred share has a par value of $100. The outstanding bond has a total face valueof $450,000 and currently sells for 102% of face. The pre-tax yield-to-maturity on the bond is 8.49%.Calculate the total market value of the firm.
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 17P
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Question
Western Electric has 35,000 ordinary shares outstanding at a price per share of $47 and a
return
$58 a share. The
of $450,000 and currently sells for 102% of face. The pre-tax yield-to-maturity on the bond is 8.49%.Calculate the total market value of the firm.
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