Question
Please answer the following question in Excel - ABC Incorporated shares are currently trading for $32 per share. The firm has 1.13 billion shares outstanding.
Please answer the following question in Excel
- ABC Incorporated shares are currently trading for $32 per share. The firm has 1.13 billion shares outstanding. The market value of the firms debt is $2 billion. The 10-year Treasury bond rate is 6.25%. ABC as an outstanding credit rating and has earned a AAA rating from the major credit rating agencies: the current yield on AAA bonds is 6.45%. The historical equity market risk premium is 5.5%. ABCs equity beta is estimated to be 1.1, and its marginal tax rate (including federal, state, local, and international taxes) is 40%.
a. What is ABCs cost of equity?
b. What is ABCs after-tax cost of debt?
c. What is ABCs WACC
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