Question
Keiretsu Inc has 80,000 bonds outstanding that are selling at par value. Bonds with similar characteristics are yielding 8.5%. The company also has 4 million
Keiretsu Inc has 80,000 bonds outstanding that are selling at par value. Bonds with similar characteristics are yielding 8.5%. The company also has 4 million shares of common stock outstanding. The stock has a beta of 1.1 and sells for $40 a share. The Japanese Treasury bill is yielding 4% and the market risk premium is 8%. Keiretsus tax rate is 35%.
- What is Keiretsus cost of equity (Re)?
- What is Keiretsus AFTER-TAX cost of debt (Rd)?
C. What is Keiretsus proportion of debt (Wd?
- What is Keiretsus proportion of equity (We)?
- Is there an easily identifiable debt-equity ratio that will maximize the value of a firm? Why or why nott ?
- What is Keiretsu's weighted average cost of capital (WACC)?
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Technical Analysis For The Trading Professional Strategies And Techniques For Todays Turbulent Global Financial Markets
Authors: Constance M. Brown
2nd Edition
007175914X,0071759158
