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2. Using the information provided in the table, determine the information missing below (the YELLOW cells). Assume LMM has a 21 percent tax rate. Maturity
2. Using the information provided in the table, determine the information missing below (the YELLOW cells). Assume LMM has a 21 percent tax rate.
Maturity Year | Book value (millions) | Percent of total | Market value (millions) | Percent of total | Yield to Maturity | Book values | Market values |
2021 | $ 250 | 0.17 | 266.06 | 0.17 | 0.963% | 0.17% | 0.16% |
2027 | 300 | 0.21 | 326.99 | 0.21 | 1.776% | 0.37% | 0.37% |
2048 | 400 | 0.28 | 459.24 | 0.29 | 3.274% | 0.90% | 0.96% |
2050 | 500 | 0.34 | 506.39 | 0.32 | 3.034% | 1.05% | 0.99% |
Total | $ 1,450 | 1.00 | $ 1,558.68 | 1.00 | 2.48% | 2.49% |
Weights | |||
Book value of debt | million | ||
Book value of equity | million | ||
Book value of company | million | ||
Market value of debt | million | ||
Market value of equity | million | ||
Market value of company | million | ||
WACC using book value | |||
WACC using market value |
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