Question
Company corp has about $3,973 million in long-term bonds currently outstanding and $3,271 million in shares (book valued) outstanding. (They have no bank loans listed
Company corp has about $3,973 million in long-term bonds currently outstanding and $3,271 million in shares (book valued) outstanding. (They have no bank loans listed on their SFP.)
a. What is the firms total capitalization?
b. Total capitalization is at its essence external financing. So what percent of Company corps external financing is debt? What percent of their external financing is equity? (Round your answers to the nearest percent.)
c. Assuming Compnays bonds currently provide a YTM of 2.2%, and their stock is providing a 9.5% return based on its current stock price and growth rate, what is the cost of Companys external financingthat is, what is their WACC?
d. What is a good estimate of Companys RRR?
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