Question
A firm issues 45 million shares, which currently sell for $90 per share. Risk free rate is 4.9%, Rm = 14.1%, and e = 1.03.
A firm issues 45 million shares, which currently sell for $90 per share. Risk free rate is 4.9%, Rm = 14.1%, and e = 1.03. Debt for the firms consists of bonds of which currently quote at 107, have a coupon rate of 9.25% paid semi-annually, have a 15.5 YTM, and have a face value of outstanding debt of 1 billion.
What is the cost of equity and debt?
What is the weighted average cost of capital?
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Fundamentals Of Futures And Options Markets
Authors: Jonn C. Hull
8th International Edition
0133382850, 9780133382853
