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Cowbell Corp. is a manufacturer of musical instruments. There are 45 million shares, each selling at $80 / share with an equity beta of 1.48.
Cowbell Corp. is a manufacturer of musical instruments. There are 45 million shares, each selling at $80 / share with an equity beta of 1.48. The risk-free rate is 5% and the market risk premium is 9%. There is $1.07 billion in outstanding debt (face value), paying a 9% s/a coupon for 15 years, which is currently quoted at 110% of par. Assuming a 40% tax rate, what is Cowbell Corp.’s WACC?
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First calculate the cost of equity using the CAPM formula Cost of equity Riskfree rate Equity beta M...
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Financial Reporting Financial Statement Analysis And Valuation A Strategic Perspective
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
9th Edition
1337614689, 1337614688, 9781337668262, 978-1337614689
