Question
A firm has 1,500,000 shares of common stock trading at $36.28 per share. It also has 65,000 bonds outstanding (par of $1,000) that are trading
A firm has 1,500,000 shares of common stock trading at $36.28 per share. It also has 65,000 bonds outstanding (par of $1,000) that are trading at $1,158 each. The bonds mature in 36 years, have a coupon rate of 8.25%, and pay coupons semi-annually. The firm's beta is 1.04, the risk-free rate is 3.25%, and the market risk premium is 9.2%. The tax rate is 36%. What is the firm's WACC?
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The Sterling Bonds And Fixed Income Handbook
Authors: Mark Glowrey
1st Edition
0857190423, 978-0857190420
