Anson Jackson Court Company (AJC)

TheAnson Jackson Court (AJC) currently has $150,000 market value (and book value) of perpetual debt outstanding carrying a coupon rate of6%. Its earnings before interest and taxes (EBIT) are $89,000, and it is a zero growth company.AJC's current cost of equity is 10%, and itstax rate is 25%.The firm has 10,000 shares of common stock outstanding selling at a price per share of $60.00.

Refer to the data for the Anson Jackson Court Company (AJC). What is AJC's current total market value and weighted average cost of capital?

Total Market Value; WACC

a.$650,000; 9.4%

b.$750,000; 8.9%

c.$650,000; 8.9%

d.$750,000; 8.4%

e.$750,000; 9.4%