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Company A has 2,250 units of bonds and 75,000 units of common shares outstanding. Market price per unit for bonds is $1,140 while common share
Company A has 2,250 units of bonds and 75,000 units of common shares outstanding. Market price per unit for bonds is $1,140 while common share is trading at $55 per share. After-tax cost of debt is 5.25% and the common share has a cost of 14.05%. The corporate tax rate is 34 percent. The company's weighted average cost of capital is closest to?
10.71% | ||
13.79% | ||
10.03% | ||
19.30% |
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