What is the weighted-average cost of capital for SKYE Corporation given the following information? Equity shares outstanding
Question:
What is the weighted-average cost of capital for SKYE Corporation given the following information?
Equity shares outstanding ...................................... 1 million
Stock price per share ....................................................... $30.00
Yield to maturity on debt .............................................. 7.68%
Book value of interest-bearing debt ...................... $10 million
Coupon interest rate on debt ............................................ 9%
Interest rate on government bonds .................................. 6%
SKYE’s equity beta ............................................................... 0.75
Historical excess return on stocks ................................... 6.3%
Tax rate ................................................................................ 40%
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Step by Step Answer:
Answer The weighted average cost of capital for SK YE Corporation is 7 3 Explanation The weighted av...View the full answer
