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A company has 2 million shares of common stock outstanding and 2 5 , 0 0 0 semiannual bonds outstanding, each with an annual coupon
A company has million shares of common stock outstanding and semiannual bonds outstanding, each with an annual coupon rate of and a par value $ The common stock currently sells for $ per share and has a beta of The bonds have exactly years to maturity and the current annual yield to maturity YTM is The market risk premium for stocks is riskfree Treasury Bills are yielding and company's tax rate is Assume that CAPM holds, but IGNORE the impact of leverage on cost of equity capital ie this question is from Chapter not Calculate the following:
Market Value of debt $ Blank Fill in the blank, read surrounding text.
When calculating your bond price, keep as many decimals as possible in your intermediate steps. Round your final bond price to decimal places closest penny so that final answer is automatically rounded to closest dollar DO NOT use commas!
Market Value DebtEquity Ratio Blank Fill in the blank, read surrounding text.
Express answer as a decimal, rounded to decimal places ie
After tax Cost of Debt Blank Fill in the blank, read surrounding text.
Express your answer in percentage terms, rounded to decimal places ie
Cost of equity Blank Fill in the blank, read surrounding text.
Express your answer in percentage terms, rounded to decimal places ie
WACC Blank Fill in the blank, read surrounding text.
Dont round intermediate steps. Express your answer in percentage terms, rounded to decimal places ie
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