Question
A firm has 36.30 million shares of common stock outstanding at a price of $32.81 per share. The firm also has 492000.00 bonds outstanding with
A firm has 36.30 million shares of common stock outstanding at a price of $32.81 per share. The firm also has 492000.00 bonds outstanding with a current price of $1,089.00. The outstanding bonds have yield to maturity 6.18%. The firm's common stock beta is 2.49 and the corporate tax rate is 38.00%. The expected market return is 11.62% and the T-bill rate is 1.07%. Compute the following:
1) Weight of Equity of the firm
2) Weight of Debt of the firm
3) Cost of Equity of the firm
4) After Tax Cost of Debt of the firm
5) WACC for the Firm
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
10th Canadian edition
1259261018, 1259261015, 978-1259024979
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