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Amazon Corporation has common stock with a market Value of 1,800,000,000,000 USD. Its Debt has a Market Value of 68,000,000,000 USD. Assume: Amazons's beta is
Amazon Corporation has common stock with a market Value of 1,800,000,000,000 USD. Its Debt has a Market Value of 68,000,000,000 USD. Assume: Amazons's beta is 1.15, the expected market return is 11.5%, the risk free rate is 200%, the pretax cost of debt is 40 percent, and the relevant tax rate is 21 percent a. What is the company's WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2. decimal places, e.g., 3216.) b. What is the aftertax cost of debt? (Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 3216 a. WACC 11.20 % b. Aftertax cost of debt
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