Question
JNCT corp. has the following data to present. (1) You will use the firm's 30-year bonds (noncallable) that were issued 10 years ago. (2)
JNCT corp. has the following data to present. (1) You will use the firm's 30-year bonds (noncallable) that were issued 10 years ago. (2) The respective bonds have a coupon rate of 8.00% (par value = $1,000) (3) Currently the bond is priced at $1,050. (4) The company's tax rate is 40%. (5) The 1-year T-note rate is at 4.50%. The market risk premium is 5.50%. (6) The stock's beta is estimated 1.20. (7) Target capital structure: Wd = 35% debt Wcs = 65%. The firm does not expect to issue any new shares. What is its after-tax cost of debt? What its WACC?
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Government and Not for Profit Accounting Concepts and Practices
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