You are given the following information concerning Around Town Tours: Debt: 8,500, 8 percent coupon bonds...

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You are given the following information concerning Around TownTours: Debt: 8,500, 8 percent coupon bonds outstanding, with 15years to maturity, face value of 1000, and price at 1026. Thesebonds pay interest semiannually. Common stock: 260,000 shares ofcommon stock selling for $76 per share. The stock has a beta of0.92. Preferred stock: 7,500 shares of 5 percent preferred stockwith face value of $100, selling at $88 per share. Market: A 13.2percent expected return, a 4.5 percent risk-free rate, and a 34percent tax rate. Questions: 1) what is the value, weight and costof debt? 2) what is the value, weight and cost of equity? 3) Whatis the value weight and cost of preferred? 4) What is the weightedaverage cost of capital (WACC)?

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1 MV of equityPrice of equitynumber of shares outstanding MV of equity76260000 19760000 MV of BondPar valuebonds outstandingage of par MV of Bond100085001026 8721000 MV of Preferred equityPricenumber of shares outstanding MV of Preferred equity887500 660000 MV of firm MV of See Answer

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You are given the following information concerning Around TownTours: Debt: 8,500, 8 percent coupon bonds outstanding, with 15years to maturity, face value of 1000, and price at 1026. Thesebonds pay interest semiannually. Common stock: 260,000 shares ofcommon stock selling for $76 per share. The stock has a beta of0.92. Preferred stock: 7,500 shares of 5 percent preferred stockwith face value of $100, selling at $88 per share. Market: A 13.2percent expected return, a 4.5 percent risk-free rate, and a 34percent tax rate. Questions: 1) what is the value, weight and costof debt? 2) what is the value, weight and cost of equity? 3) Whatis the value weight and cost of preferred? 4) What is the weightedaverage cost of capital (WACC)?