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BlockOut Co. has 76,622 bonds outstanding that are selling at par value. The bonds yield 8.1 percent. The company also has 5.4 million shares of
BlockOut Co. has 76,622 bonds outstanding that are selling at par value. The bonds yield 8.1 percent. The company also has 5.4 million shares of common stock outstanding. The stock has a beta of 1.16 and sells for $40.6 a share. The U.S. Treasury bill is yielding 4.8 percent and the market risk premium is 7.3 percent. Blackout's tax rate is 39 percent. What is the firm's weighted average cost of capital? (Enter answer in percents.) QUESTION 19 Gambler Corp can borrow at 7 percent. Gambler currently has no debt, and the cost of equity is 13 percent. The current value of the firm is $21.269. The corporate tax rate is 26 percent. What will the value of the firm be if Gambler borrows $9,123 and uses the proceeds to repurchase shares
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