Question
Long-term debt outstanding = $300,000 Yield to maturity (r D ) = 8% Number of shares of common stocks = 10,000 Price per share =
Long-term debt outstanding = $300,000
Yield to maturity (rD) = 8%
Number of shares of common stocks = 10,000
Price per share = $50
Book value per share = $25
Beta of common stock = 1.5
Expected rate of return on market portfolio = 12%
Risk-free rate = 6%
Calculate and report the weighted-average cost of capital for company XYZ. Assume taxes are equal to zero. Report your answer in percentage points rounded to one decimal point.
Step by Step Solution
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Step: 1
To calculate the weightedaverage cost of capital WACC for company XYZ we need to find the cost of de...
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Intermediate Accounting Volume 2
Authors: Kin Lo, George Fisher
4th Edition
0135220491, 9780135220498
