Question
1.) What weight should be used for equity in a weighted average cost of capital calculation for a firm with $60 million face value debt
1.) What weight should be used for equity in a weighted average cost of capital calculation for a firm with $60 million face value debt selling at 85% of par, $70 million in book value of equity and $51 million in the market value of equity?
2.) What is the expected growth rate in dividends for a firm in which investors require a 15% rate of return and the dividend yield is 7%?
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The Handbook Of Equity Derivatives
Authors: Jack Clark Francis, William W. Toy, J. Gregg Whittaker
1st Edition
0471326038, 978-0471326038
