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Q) Suppose a firm has 25.50 million shares of common stock outstanding at a price of $31.78 per share. The firm also has 215000.00 bonds
Q) Suppose a firm has 25.50 million shares of common stock outstanding at a price of $31.78 per share. The firm also has 215000.00 bonds outstanding with a current price of $1,158.00. The outstanding bonds have yield to maturity 6.55%. The firm's common stock beta is 2.00 and the corporate tax rate is 39.00%. The expected market return is 14.47% and the T-bill rate is 1.64%. Compute the following: -Weight of Equity of the firm -Weight of Debt of the firm
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