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Given the following information about Company D, what is the company's weighted average cost of capital (WACC)? (6 points) Common Stock: 2 million shares outstanding
Given the following information about Company D, what is the company's weighted average cost of capital (WACC)? (6 points) Common Stock: 2 million shares outstanding at $31 per share; stocks asset beta = 0.5, company D/E ratio = 0.3. Bonds: 80,000 bonds outstanding $1,000 face value for each bond 7% semi-annual coupon 10 years to maturity The bonds are selling at 97.25% of face value Market risk premium = 8% Risk-free rate = 4% Tax rate = 21%
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