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a Bolster Foods' (BF) balance sheet shows a total of $26 million long-term debt with a coupon rate of 8.50%. The yield to maturity on
a Bolster Foods' (BF) balance sheet shows a total of $26 million long-term debt with a coupon rate of 8.50%. The yield to maturity on this debt is 8.00%, and the debt has a total current market value of $28 million. The balance sheet also shows that the company has 10 million shares of stock, and the stock has a book value per share of $3.00. The current stock price is $21.00 per share, and stockholders' required rate of return, rs, is 13.00%. The company recently decided that its target capital structure should have 20% debt, with the balance being common equity. The tax rate is 25%. Calculate WACCs based on book, market, and target capital structures, and then find the sum of these three WACCs. Do not round your intermediate calculations. a. 33.53% b. 33.82% c. 27.88% d. 26.32% e. 35.09%
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