Question
Assume Tiger Corporation needs to raise in capital so it can expand its operational activities. Company issues and sells 33,000 shares of stock at
Assume Tiger Corporation needs to raise in capital so it can expand its operational activities. Company issues and sells 33,000 shares of stock at $13 each to raise the money which expect to provide a return of 5.8%. Furthermore, they sell 33,000 bonds for $50 each to raise the other in capital with expected rate of return of 9.5% where tax rate is 15%. What would be the effect of this financing on WACC if industry average is 5%?.
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Personal Financial Planning
Authors: Lawrence J. Gitman, Michael D. Joehnk, Randy Billingsley
13th edition
1111971633, 978-1111971632
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