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Answer the following questions given the information below: Equity Information 40 million shares $100 per share Beta = 1.15 Market risk premium = 8% Risk-free
- Answer the following questions given the information below:
Equity Information
40 million shares
$100 per share
Beta = 1.15
Market risk premium = 8%
Risk-free rate = 3%
Debt Information
$1 billion in outstanding debt (face value)
YTM = 9%
- What is the cost of equity?
- What is the cost of debt?
- What is the after-tax cost of debt?
- What are the capital structure weights?
- What is the WACC?
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Money And Capital Markets
Authors: Peter Rose, Milton Marquis
10th Edition
0077235800, 9780077235802
