question archive Suppose that Rolex Company is planning to raise 100 million dollars funding from different sources
Suppose that Rolex Company is planning to raise 100 million dollars funding from different sources
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Suppose that Rolex Company is planning to raise 100 million dollars funding from different sources. The draft plan indicates that the company will issue a bond and stocks as follows:
- Issue a bond with a market value of 40 million dirhams and 5% yield to maturity.
- Issue 2 million Common Stocks at 30 dirhams per share, and the common stocks are expected to pay 4 dirhams dividend per share and it is expected to grow at a constant growth rate of 2%.
- The company is in the 30 percent tax bracket.
Calculate the weighted average cost of capital of the company
