calculate the required turn on debt

calculate the required rate of return on common stock

is the firm prinarliy debt or equity financed

You will evaluate the project based on WACC. Your firm currently has a single $1,000 par value bond outstanding with 10 years remaining until maturity. This is your only bond issue and its current market value is $941.11 based on a YTM of 11%. Your firm's common stock is currently selling for $5 per share with 2,000 shares outstanding. Your firm's beta is .87. The S&P 500 and 3-month T-Bills is averaging a 10% and 4% per year respectively. 2. Calculate the required rate of return on debt 3. Calculate the required rate of return on common stock 4. Is the firm primarily debt or equity financed? a. Evaluate its capital structure this in light of the debt overhang theory