1 What is the WACC for a company that gets 40% of their financing from debt and 60% from equity, their Kd is 7% and their ke is 12%? 2 What is the WACC for a company that get 30% of their financing from debt, their Kd is 10% and their ke is 15%? Federated Junkyards of America (FJA) has the following information on capital: Debt: $75,000,000 book value outstanding. The debt is trading at 90% of book value. The interest rate on the debt is 9%. Equity: 2,500,000 shares selling at $42 per share. Assume the expected rate of return on Federated's stock is 18%. Taxes: Federated's marginal tax rate is Tc = 35. 3. From its book value, what is the trading value (aka market value) of FIA's debt? 4 What is the actual cos of debt kd of FIA? 5 What is the market value (aka trading value of equity of FIA? 5 What is the market value (aka trading value) of equity of FJA? 54 55 56 un 57 58 59 60 6 What is FJA's total amount of capital (from both equity and debt, using market value)? 7 Using market value, what are FJA's weight of debt (WTd) and weight of equity (WTe)? 8 What is the WACC of FJA? WN 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 The B.B. Lean Co. (BBLC) currently already has 1.4 million shares of stock outstanding. The stock is selling for $20 per share. The firm's debt which has a book value of $5 million is publicly traded and quoted at 93 percent of book value, and its current interest cost is announced at 11 percent. The risk-free rate is 8 percent, and the market risk premium is 7 percent. You've estimated that Lean has a beta of.74. If the corporate tax rate is 34 percent: 9 What is BBLC's market value of equity? 10 What is BBLC's market value (aka trading value) of debt? 11 Which source of equity is BRL Cusing