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Part 1 of Lesson 13 (Please show me the steps) Problem 1 Q) Suppose a firm has 41.60 million shares of common stock outstanding at
Part 1 of Lesson 13
(Please show me the steps)
Problem 1
Q) Suppose a firm has 41.60 million shares of common stock outstanding at a price of $34.86 per share. The firm also has 462000.00 bonds outstanding with a current price of $1,094.00. The outstanding bonds have yield to maturity 8.37%. The firm's common stock beta is 0.65 and the corporate tax rate is 37.00%. The expected market return is 14.98% and the T-bill rate is 2.09%. Compute the following:
|
-Weight of Equity of the firm |
-Weight of Debt of the firm |
-Cost of Equity of the firm |
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