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A firm has 3,000,000 shares of common stock trading at $42.48 per share. It also has 65,000 bonds outstanding (par of $1,000) that are
A firm has 3,000,000 shares of common stock trading at $42.48 per share. It also has 65,000 bonds outstanding (par of $1,000) that are trading at $691 each. The bonds mature in 36 years, have a coupon rate of 8.25%, and pay coupons semi- annually. The firm's beta is 1.24, the risk-free rate is 3.25%, and the market risk premium is 7.2%. The tax rate is 36%. What is the firm's WACC?
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Financial Accounting in an Economic Context
Authors: Jamie Pratt
9th edition
9781118803035, 1118582551, 1118803035, 978-1118582558
