Question
Bribie Thriller Company has debt outstanding with a book value of $30 million. The debt is trading in the market at 90 per cent
Bribie Thriller Company has debt outstanding with a book value of $30 million. The debt is trading in the market at 90 per cent of book value. The yield to maturity at current market prices is 10 per cent. The 20 million shares of Bribie are selling at $3.15. The cost of equity is 15 per cent, and the tax rate is 30 per cent. Calculate the weighted average cost of capital for the Bribie Thriller Company Ltd.
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Fundamentals of Investing
Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk
12th edition
978-0133075403, 133075354, 9780133423938, 133075400, 013342393X, 978-0133075359
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