He also wants to know the wacc and has given you the, Ask an Expert

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He also wants to know the WACC and has given you the following information about your capital budgeting:

The 20 year $1000 par value mortgage bonds were sold at $952.67 and pay 8%. They had a $47.67 flotation cost.

1. What is the cost of the mortgage bonds?

The 15 year $500 par value debentures were sold at $486.50 and pay 6%. They had a $26.50 flotation cost.

2. What is the cost of the debentures?

DWOTT paid a dividend of $.80 last year and expects them to grow 15% next year and into the foreseeable future. The stock currently trades at $36.70.

3. What is the cost of retained earnings?

4. What is the weighted average cost of capital?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92759014

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