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A companys capital structure consists of: 100,000 bonds, each with a face value of $100 paying a semi-annual coupon of 6% p.a., and with 5
A companys capital structure consists of:
- 100,000 bonds, each with a face value of $100 paying a semi-annual coupon of 6% p.a., and with 5 years to maturity. These bonds are currently trading at a market yield of 5% p.a.
- 1,000,000 ordinary shares currently trading at $20 each.
If the company was calculating its weighted average cost of capital (WACC), the proportion of financing provided by bonds is:
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Managerial Accounting An Introduction To Concepts Methods And Uses
Authors: Michael W. Maher, Clyde P. Stickney, Roman L. Weil, Sidney Davidson
7th Edition
9780030259630
