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Q1) Suppose a firm has 45.00 million shares of common stock outstanding at a price of $32.22 per share. The firm also has 204000.00 bonds
Q1) Suppose a firm has 45.00 million shares of common stock outstanding at a price of $32.22 per share. The firm also has 204000.00 bonds outstanding with a current price of $965.00. The outstanding bonds have yield to maturity 7.51%. The firm's common stock beta is 2.474 and the corporate tax rate is 37.00%. The expected market return is 10.94% and the T-bill rate is 5.49%. 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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