Question
A firm has 2,000,000 shares of common stock outstanding with a market price of $2 per share. The firm also has 2,000 bonds outstanding with
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A firm has 2,000,000 shares of common stock outstanding with a market price of $2 per share. The firm also has 2,000 bonds outstanding with a market value of $1,200 per bond. The bonds have a 10% coupon rate (semiannual coupons) and mature in 15 years. The firms beta is 1.2, the T-bill rate is 5%, and the market risk premium is 7%. If the tax rate is 34%, what is the WACC?
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The Infographic Guide To Personal Finance
Authors: Michele Cagan CPA, Elisabeth Lariviere
1st Edition
1507204663, 978-1507204665
