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Q1) Suppose a firm has 16.70 million shares of common stock outstanding at a price of $23.23 per share. The firm also has 257000.00 bonds
Q1) Suppose a firm has 16.70 million shares of common stock outstanding at a price of $23.23 per share. The firm also has 257000.00 bonds outstanding with a current price of $1,013.00. The outstanding bonds have yield to maturity 9.76%. The firm's common stock beta is 1.227 and the corporate tax rate is 35.00%. The expected market return is 9.87% and the T-bill rate is 5.53%. Compute the following: |
a) Weight of Equity of the firm |
b) Weight of Debt of the firm |
c) Cost of Equity of the firm |
d) After Tax Cost of Debt of the firm |
e) WACC for the Firm |
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