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Brians Bull Shoals Bait and Tackle has 5,000,000 shares outstanding at a price of $80/share and a beta of 0.8. The Expected Return on the
- Brians Bull Shoals Bait and Tackle has 5,000,000 shares outstanding at a price of $80/share and a beta of 0.8. The Expected Return on the Market is 12% and the Risk-Free Rate is 3.00%. They also have one bond issue outstanding that has a face value of $100,000,000, matures in 10 years and trades in the market at 98 (98% of Par). Bonds of similar companies with similar maturities have a yield spread of 50%. The companys tax rate is 35%. Using this information, please answer the following questions:
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- What is the cost of debt (Rd)?
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- What is the cost of equity (Re)?
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- What is the market value of the debt (MVd)?
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- What is the market value of the equity (MVe)?
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- What is the value of the firm (MVd + MVe)?
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- What is the weight of debt (Wd)?
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- What is the weight of equity (We)?
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- What is the companys WACC?
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Foundations Of Statistics For Data Scientists With R And Python
Authors: Alan Agresti
1st Edition
0367748452, 978-0367748456
