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Problem w1 I10 marksl: A firm has 10000,000 shares of common stock outstanding, each with a market price of $15.00 per share. It has 80,000

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Problem w1 I10 marksl: A firm has 10000,000 shares of common stock outstanding, each with a market price of $15.00 per share. It has 80,000 bonds outstanding, each selling for 97020 The bonds mature in 15 years, have a coupon rate of 9%, and pay coupons semi annually. The firm's equity has a beta of 1.9 and the expected market return is 10%. T he tax rate is 30% and the risk free rate is 4%. a) What is the total market value ofcommon stocks (2 points)? E- s_ b) What is the total market value of bonds (2 points)? D-S c) What is the cost or rate of return of equity (R) (2 points)? RE d) What is the cost or rate of return of debt (2 points)? e) What is the weighted average cost of capital for the firm (2 points)? WACC

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