Johnny cake ltd has 8 million share of stock outstanding, Ask an Expert

Finance

Johnny Cake Ltd. has 8 million share of stock outstanding selling at $22 per share and an issue of $40 million in 10 percent annual coupon bonds with an maturity of 17 years selling at 94.0 percent of per. Assume Johnny Cake's weighted-average tax rate is 34 percent, its next dividend is expected to be $3 per share and all future dividends are expected to grow at 5 percent per year, indefinitely.

What is its WACC? (Do not round intermediate calculations and round your final answer to round 2 decimal places.)

Before-tax cost of equity

Before-tax cost of debt

Equity weight

Debt weight

WACC

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91610296

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