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Big Door Company has 8 . 7 million shares outstanding, which are currently trading for about $ 1 3 per share and have a levered
Big Door Company has million shares outstanding, which are currently trading for about $ per share and have a levered equity beta of Big Door has outstanding bonds, with a coupon rate, payable semiannually and due in years. The bonds are rated BBB Currently the credit spread for BBB is basis points over equivalentmaturity Government of Canada debt. The current yield on year Canada bonds is compounded semiannually. The riskfree interest rate is and the market risk premium is The company has a tax rate. Do not round intermediate calculations.
a Calculate Big Door's WACCRound your answer to decimal places.
WACC
b Calculate Big Door's unlevered beta, using the following formula: Round your answer to decimal places.
Unlevered beta
c If Big Door was debtfinanced, what would be its WACC? Assume that the beta of its debt is unchanged by the capital structure change. Round your answer to decimal places.
WACC
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