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need asap Blg Door Company has 8.9 million shares outstanding. which are currently trading for about $18 per share and have a levered equity beta
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Blg Door Company has 8.9 million shares outstanding. which are currently trading for about $18 per share and have a levered equity beta of 1.4. Big Door has 19,000 outstanding bonds, with a 6% coupon rate, payable semi-annually and due in 10 years. The bonds are rated BBB Currently the credit spread for BBB is 133 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 3%, and the market risk premium is 6%. The company has a 35% tax rate (Do not round intermediate calculations.) a. Calculate Big Door's WACC. (Round your answer to 2 decimol places.) b. Caiculate Big Door's unlevered beta, using the following formula (Round your onswer to 2 decimal places.) U=1+(1T)D/EAh1+al+A4u(1Tj)D/E 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 decimol places.) Step by Step Solution
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