Question
A company's capital structure is as follows : m Ordinary shares ( 1 par value ) 10 Reserves 4 9% bonds 7 total 21 The
A company's capital structure is as follows : m Ordinary shares ( 1 par value ) 10 Reserves 4 9% bonds 7 total 21
The bonds are redeemable at par in 8 years. The company's ordinary shares are trading at 280p, while the bonds are trading at 102.60 . The company pays tax at 40 % per year and its cost of equity is 14 % per year . What is the company's WACC ?
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Investment Analysis And Portfolio Management
Authors: Frank K. Reilly, Keith C. Brown
6th Edition
003025809X, 978-3540014386
