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A firm has three sources of debt capital: ( i ) 3 - year, 6 % $ 1 0 0 0 coupon bonds each currently
A firm has three sources of debt capital: iyear, $ coupon bonds each currently
trading at The firm has M coupon bonds iiMyear zerocoupon bonds each currently
trading at iii a $Myear bank loan. The tax rate is and interest is compounded semiannually for both bonds. The beta is risk free rate and market risk premium The firm has million common stocks each trading at $
a Compute KdT for the coupon bond.
b Compute KdT for the zerocoupon bond.
cCompute KdT for the bank loan.
dCompute the WACC.
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