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Given the following information about your firms capital structure, calculate your firms WACC (assume the corporate tax rate is 35%). Debt Number of bonds outstanding
Given the following information about your firms capital structure, calculate your firms WACC (assume the corporate tax rate is 35%).
- Debt
- Number of bonds outstanding = 14,000
- price per bond = $1,165
- par value per bond = $1,000
- coupon rate = 6% (paid annually)
- Years to maturity = 10
- Common Stock
- Number of shares outstanding = 1,000,000
- Price per share = $25
- Book value per share = $15
- Beta = 1.4
- Risk free rate = 4.5%
- Market risk premium = 5%
A.) 7.19%
B.) 8.53%
C.) 7.72%
D.) 7.98%
E.) 9.08%
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