Question
1.Given the following information for Bravo Products, Inc., compute the firms WACC. Book Value Market Value Beta Debt $5,000,000 $4,500,000 0.1 Preferred Stock $1,000,000 $3,000,000
1.Given the following information for Bravo Products, Inc., compute the firms WACC.
|
| Book Value | Market Value | Beta |
| Debt | $5,000,000 | $4,500,000 | 0.1 |
| Preferred Stock | $1,000,000 | $3,000,000 | 0.75 |
| Common Equity | $1,000,000 | $13,500,000 | 1.05 |
Assume that Bravo has a tax rate of .34, the risk-free rate is 3.25 percent and the required rate of return on the market portfolio is 12 percent.
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Investments
Authors: Zvi Bodie, Alex Kane, Alan J. Marcus
8th Edition
0077261453, 978-0077261450
