Q1) Suppose a firm has 18.60 million shares of common stock outstanding at a price of $28.56
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Q1) Suppose a firm has 18.60 million shares of common stock outstanding at a price of $28.56 per share. The firm also has 282000.00 bonds outstanding with a current price of $929.00. The outstanding bonds have yield to maturity 7.98%. The firm's common stock beta is 2.427 and the corporate tax rate is 40.00%. The expected market return is 9.38% and the T-bill rate is 5.93%. Compute the following:
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c) Cost of Equity of the firm (2 points) |
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