Question
Assume JUP has debt with a book value of $20 million, trading at a market value of 24 million. The bonds have a yield to
Assume JUP has debt with a book value of $20 million, trading at a market value of 24 million. The bonds have a yield to maturity (interest) of 7%. The firm's book value of equity is $16 million, and it has 2 million shares trading at $19 per share. The firm's cost of equity is 12%. What is JUP's WACC if the firm's marginal tax rate is 35%?
a. 9.57%
b. 10.03%
c. 9.12%
d. 7.29%
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Personal Financial Planning
Authors: Lawrence J. Gitman, Michael D. Joehnk
11th Edition
0324422865, 978-0324422863
