Question
8. BS Corporation has, 250,000 shares of 6% preferred stock outstanding, 105,000 7.5 percent semiannual bond outstanding, par value of RM1000 each and 9 million
8. BS Corporation has, 250,000 shares of 6% preferred stock outstanding, 105,000 7.5 percent semiannual bond outstanding, par value of RM1000 each and 9 million shares of common stock outstanding. The common stock has a beta of 1.25 and currently sells for RM34 per share. The preferred stock currently sells for RM91per share and the bond have 15 years to maturity and sells for 93% of par. The market risk premium is 8.5 percent. T-bills are yielding 5%. BS Corporation tax is at 35%. a. What is the firms market value capital structure
b. If BS Corporation is evaluating a new investment project that has the same risk as the firms typical project, calculate WACC.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started