Question
For short-answer questions, plz provide your answers and explanations. For numerical questions, plz show your work . Type it out and make sure it's correct
For short-answer questions, plz provide your answers and explanations. For numerical questions, plz show your work. Type it out and make sure it's correct plz. Plz answer the a & b at least I WILL GIVE THUMBS UP!!!! THANKS!
A firm has 10,000,000 shares of common stock outstanding, each with a market price of $15.00 per share. It has 80,000 bonds outstanding, each selling for $1020. The bonds mature in 15 years, have a coupon rate of 9%, and pay coupons semi-annually. The firm's equity has a beta of 1.9, and the expected market return is 10%. The tax rate is 30% and the risk-free rate is 4%.
- What is the total market value of common stocks?
- What is the total market value of bonds?
- What is the cost of equity?
- What is the cost of debt?
- What is the cost of capital for the firm?
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Corporation Finance Volume 2 Of 2
Authors: Hastings Lyon
1st Edition
124008997X, 9781240089970
