Question
Below you are given information on Axelrod Enterprisess capital structure as well as information on Axelrods stock and bonds. Compute Axelrods cost of capital. Capital
- Below you are given information on Axelrod Enterprisess capital structure as well as information on Axelrods stock and bonds. Compute Axelrods cost of capital.
| Capital Structure | |
| Book Value of Debt | $2,500,000,000 |
| Market Value of Debt | $2,250,000,000 |
| Book Value of Equity | $3,100,000,000 |
| Market Value of Equity | $4,200,000,000 |
|
|
|
| Stock Info |
|
| Beta | 0.95 |
| Risk free rate | 0.85% |
| Market risk premium | 8.00% |
| Bond Info |
|
| Coupon rate | 5% |
| Years to mat;urity | 18 |
| Par value | $1,000 |
| Price of bond | $1,265.25 |
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Authors: Jeb Blount, Mike Weinberg
1st Edition
1119144752, 978-1119144755
