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How do I find the rate of return for debt in part a? How do I find beta for debt and beta levered for part

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How do I find the rate of return for debt in part a?

How do I find beta for debt and beta levered for part b?

I don't know how to solve part c

image text in transcribedimage text in transcribed
c. If Big Door was 50% debt-financed, what would be its WACC? Assume that the beta of its debt is unchanged by the capital structure change. (Round your answer to 2 decimal places.) WACC |:| 95 Big Door Company has 10.1 million shares outstanding, which are currently trading for about $12 per share and have an equity beta of 1.3. Big Door has 19,800 outstanding bonds, with a 7% coupon rate, payable semi-annually and due in 10 years. The bonds are ated BBB. Currently the credit spread for BBB is 161 basis points over equivalent- maturity Government of Canada debt. The current yield on 10-year Canada bonds is 5%, compounded semi-annually. The risk-free interest rate is 2%, and the market risk premium is 6.2%. The company has a 35% tax rate. (Do not round intermediate calculations.) a. Calculate Big Door's WACC. (Round your answer to 2 decimal places.) WACC 9.23 % b. Calculate Big Door's unlevered beta, using the following formula: BU = Blevered + Baebt X (1-T. ) XD/E 1+(1-T. ) XD/E (Round your answer to 2 decimal places.) Unlevered beta 1.25

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