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Q1) Suppose a firm has 17.40 million shares of common stock outstanding at a price of $22.07 per share. The firm also has 396000.00 bonds
Q1) Suppose a firm has 17.40 million shares of common stock outstanding at a price of $22.07 per share. The firm also has 396000.00 bonds outstanding with a current price of $962.00. The outstanding bonds have yield to maturity 9.23%. The firm's common stock beta is 1.882 and the corporate tax rate is 39.00%. The expected market return is 14.48% and the T-bill rate is 5.13%. Compute the following: |
a) Weight of Equity of the firm (2 points) |
b) Weight of Debt of the firm (2 points) |
c) Cost of Equity of the firm (2 points) |
d) After Tax Cost of Debt of the firm (2 points) |
e) WACC for the Firm (2 points) |
Answer all questions or I will downvote
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