A firm has 5 million shares of stock outstanding and 63.000 number of 6.80% annual coupon bonds
Fantastic news! We've Found the answer you've been seeking!
Question:
A firm has 5 million shares of stock outstanding and 63.000 number of 6.80% annual coupon bonds outstanding. par value is $700 each. The stock currently sells for $19 per share and has a beta of 1.57, and the bonds have 8 years to maturity and sell for 96% of par, and their yield to maturity is 7.48%. The expected return on the market portfolio is 11%, T-bills are yielding 4%, and the firm's tax rate is 35%.
What is the firm's market value capital structure ( in terms of Debt/Equity ratio) and WACC?
Related Book For
Thermodynamics An Engineering Approach
ISBN: 978-0073398174
8th edition
Authors: Yunus A. Cengel, Michael A. Boles
Posted Date: