Question
3. Calculate a firm's WACC. The total market value of the firm is $5,000,000. The capital structure consists of debt and equity. The book value
3. Calculate a firm's WACC. The total market value of the firm is $5,000,000. The capital structure consists of debt and equity. The book value of debt is $3,000,000. Debt trades at 120% of par. The cost of debt is 8%, the cost of equity is 15%, the tax rate is 20%.
WAC?
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International Finance Theory and Policy
Authors: Paul R. Krugman, Maurice Obstfeld, Marc J. Melitz
10th edition
978-0133425895, 133425894, 978-0133423631, 133423638, 978-0133423648
