Merrill Lynch Limited has the following information and a tax rate of 30 percent

ID: 2713829 • Letter: M

Question

Merrill Lynch Limited has the following information and a tax rate of 30 percent. .

Debt

2,000, 6 percent coupon bonds outstanding, $1,000 par value, 12 years to maturity, selling for 95 percent of par, the bonds make semiannual payments

Common stock

250,000 shares outstanding, selling for $55 per share; the beta is 1.20

Preferred stock

12,000 shares of 6 percent preferred stock outstanding, currently selling for $110 per share

Market

6 percent market risk premium and 4 percent risk-free rate

Determine the company's WACC by computing the following:

(a) Total Market Value for the company (no. units and points)

(b) After-tax Cost of Debt ( rounded to 3 decimal places)

(d) Cost of Preferred Stock (rounded to 3 decimal places)

(e) WACC (rounded to 3 decimal places)

Show all workings including decimal places please.