Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Calculation of individual costs and WACC BlackRock, Inc. ( BLK ) has a capital structure that consists of common stock equity and debt. The market

Calculation of individual costs and WACC BlackRock, Inc. (BLK) has a capital structure that consists of common stock equity and debt. The market capitalization of its equity is $74.356 billion and its debt has a market value of $6.028 billion.
a. Calculate the market value weights for BLK's capital structure.
b. Calculate BLK's cost of equity using a beta of 1.48, a risk-free rate of 0.76%, and a market risk premium of 5.40%.
c. Calculate BLK's cost of debt using a bond price of $1,071.46, semi-annual coupon payment of $31.25, and 10 years to maturity.
d. Calculate BLK's current WACC using a 21% corporate tax rate.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Corporate Financial Management

Authors: Douglas R. Emery, John D. Finnerty, John D. Stowe

4th Edition

1935938002, 9781935938002

More Books

Students also viewed these Finance questions