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please be accurate Ace has common stock with a market value of $20 milion, and it has one issue of bond outstanding. The bond has
please be accurate
Ace has common stock with a market value of $20 milion, and it has one issue of bond outstanding. The bond has a 9% coupon rate with a total face value of $20 million, a maturity of 10 years, and a yield to maturity of 10%. The coupons are paid annually. The current Treasury-bill rate is 8% and the expected market premium is 10 percent. The beta of Ace equity is 0.9. Assume 0% corporate tax rate. A. What is Ace's debt to equity ratio? B. What is the firm's overall required return (WACC) Step by Step Solution
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