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help 2 i have no clue 4) Consider a company that has debt of 85 million in bonds (PV of the bonds has already been
help 2
i have no clue
4) Consider a company that has debt of 85 million in bonds (PV of the bonds has already been calculated), 45 million market value of preferred stock, and 170 million market value of common stock, The required rates of return for bonds, preferred stock, and common stock are 4%,8%, and 15%, respectively. The tax rate of the company is 21%0. A) Compute the company's WACC. B) What does this value represent? C) Assume the company takes on new debt to fund a project a project that is functionally identical in risk to current operations. How will this affect the WACC of the company? 4) Consider a company that has debt of 85 million in bonds (PV of the bonds has already been calculated), 45 million market value of preferred stock, and 170 million market value of common stock. The required rates of return for bonds, preferred stock, and common stock are 4%,8%, and 15%, respectively. The tax rate of the company is 21%. A) Compute the company's WACC. B) What does this value represent? C) Assume the company takes on new debt to fund a project a project that is functionally identical in risk to current operations. How will this affect the WACC of the company Step by Step Solution
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