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If Wild Widgets Inc. were an all-equity company, it would have a beta of 1.75 . The company has a target debt-to-equity ratio of 0.4
If Wild Widgets Inc. were an all-equity company, it would have a beta of 1.75 . The company has a target debt-to-equity ratio of 0.4 . The expected return on the market portfolio is 9 percent, and Treasury bills currently yleld 5.8 percent. The company has one bond issue outstanding that matures in 20 years and has a 10.6 percent coupon rate. The bond currently sells for $1,260. The corporate tax rate is 40 percent. a. What is the company's cost of debt? (Do not round Intermedlate calculations. Round the flnal answer to 2 decimal places. Omlt % sign In your response.) Cost of debt % b. What is the company's cost of equity? (Do not round Intermedlate calculations. Round the final answer to 2 decimal places. Omlt % sign In your response.) Cost of equity % c. What is the company's WACC? (Do not round Intermedlate calculatlons. Round the final answer to 2 decimal places. Omit \% sign In your response.) WACC % If Wild Widgets Inc. were an all-equity company, it would have a beta of 1.75 . The company has a target debt-to-equity ratio of 0.4 . The expected return on the market portfolio is 9 percent, and Treasury bills currently yleld 5.8 percent. The company has one bond issue outstanding that matures in 20 years and has a 10.6 percent coupon rate. The bond currently sells for $1,260. The corporate tax rate is 40 percent. a. What is the company's cost of debt? (Do not round Intermedlate calculations. Round the flnal answer to 2 decimal places. Omlt % sign In your response.) Cost of debt % b. What is the company's cost of equity? (Do not round Intermedlate calculations. Round the final answer to 2 decimal places. Omlt % sign In your response.) Cost of equity % c. What is the company's WACC? (Do not round Intermedlate calculatlons. Round the final answer to 2 decimal places. Omit \% sign In your response.) WACC %
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