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How do I find the, Cost of Debt Capital (Rb)? Find the WACC for HHH Inc. using the following: The company has 10,000 coupon bonds
How do I find the, Cost of Debt Capital (Rb)?
Find the WACC for HHH Inc. using the following: The company has 10,000 coupon bonds oustanding selling at 104% of par, with a 7% coupon rate, semi-annual payments, $1,000 par value, and 20 years to maturity. Common stock has 200,000 shares outstanding, selling at $65 per share and a beta of 0.90. The company's tax rate is 40%. The risk-free rate of interest is 3.75% and there is a market risk premium of 5.5%. Long Term Common Other Company Market Information Debt Stock Information Number 10,000 200,000 Net Income $1,000,000 MRP 5.50% Price 104.00% $65.00 B 0.9 3.75% Par $1,000.00 $1.00 3.50% Coupon 7.00% 40.00% 20 infinite RF g T n m 2 RB RS 8.70% WACC 6.60%Step by Step Solution
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