View the step-by-step solution to:


You are given the following information concerning Parrothead Enterprises: Debt: 9,400 6.6 percent coupon

bonds outstanding, with 21 years to maturity and a quoted price of 105.00. These bonds pay interest semiannually. Common stock: 245,000 shares of common stock selling for $64.90 per share. The stock has a beta of 0.89 and will pay a dividend of $3.10 next year. The dividend is expected to grow by 5.4 percent per year indefinitely. Preferred stock: 8,400 shares of 4.70 percent preferred stock selling at $94.4 per share. Market: A 11.6 percent expected return, a 5.4 percent risk-free rate, and a 40 percent tax rate. Required: Calculate the WACC for Parrothead Enterprises. (Do not include the percent sign ($). Round your answer to 2 decimal places (e.g., 32.16).) WACC % __________________

Sign up to view the entire interaction

Top Answer

I have provided the complete calculation and it is correct. You may check... View the full answer

Sign up to view the full answer

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.


Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
Ask a homework question - tutors are online