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Q1) Suppose a firm has 34.40 million shares of common stock outstanding at a price of $48.65 per share. The firm also has 164000.00 bonds
Q1) Suppose a firm has 34.40 million shares of common stock outstanding at a price of $48.65 per share. The firm also has 164000.00 bonds outstanding with a current price of $1,047.00. The outstanding bonds have yield to maturity 9.84%. The firm's common stock beta is 2.216 and the corporate tax rate is 36.00%. The expected market return is 9.34% and the T-bill rate is 3.27%. 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) |
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