Dinklage Corp. has 9 million shares of common stock outstanding. The current share price is $81,...

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Dinklage Corp. has 9 million shares of common stock outstanding.The current share price is $81, and the book value per share is $7.The company also has two bond issues outstanding. The first bondissue has a face value of $130 million, a coupon rate of 6 percent,and sells for 92 percent of par. The second issue has a face valueof $115 million, a coupon rate of 5 percent, and sells for 103percent of par. The first issue matures in 24 years, the second in10 years.
Suppose the most recent dividend was $4.85 and the dividendgrowth rate is 5.2 percent. Assume that the overall cost of debt isthe weighted average of that implied by the two outstanding debtissues. Both bonds make semiannual payments. The tax rate is 22percent. What is the company’s WACC? (Do not roundintermediate calculations and enter your answer as a percentrounded to 2 decimal places, e.g., 32.16.)

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MV of equityPrice of equitynumber of shares outstanding MV of equity819000000 729000000 MV of Bond1Par valuebonds outstandingage of par MV of Bond11000130000092 119600000 MV of Bond2Par valuebonds outstandingage of par MV of Bond21000115000103 See Answer

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Dinklage Corp. has 9 million shares of common stock outstanding.The current share price is $81, and the book value per share is $7.The company also has two bond issues outstanding. The first bondissue has a face value of $130 million, a coupon rate of 6 percent,and sells for 92 percent of par. The second issue has a face valueof $115 million, a coupon rate of 5 percent, and sells for 103percent of par. The first issue matures in 24 years, the second in10 years.Suppose the most recent dividend was $4.85 and the dividendgrowth rate is 5.2 percent. Assume that the overall cost of debt isthe weighted average of that implied by the two outstanding debtissues. Both bonds make semiannual payments. The tax rate is 22percent. What is the company’s WACC? (Do not roundintermediate calculations and enter your answer as a percentrounded to 2 decimal places, e.g., 32.16.)