Question
Consider the following information for Federated Junkyards of America. Debt: $66,000,000 book value outstanding. The debt is trading at 87% of book value. The yield
Consider the following information for Federated Junkyards of America.
- Debt: $66,000,000 book value outstanding. The debt is trading at 87% of book value. The yield to maturity is 7%.
- Equity: 1,600,000 shares selling at $33 per share. Assume the expected rate of return on Federateds stock is 16%.
- Taxes: Federateds marginal tax rate is Tc = 0.21.
Calculate the weighted-average cost of capital (WACC). (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
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Fundamentals Of Healthcare Finance
Authors: Louis C. Gapenski
2nd Edition
1567934757, 978-1567934755
