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Q1) Suppose a firm has 49.00 million shares of common stock outstanding at a price of $23.34 per share. The firm also has 123000.00 bonds
Q1) Suppose a firm has 49.00 million shares of common stock outstanding at a price of $23.34 per share. The firm also has 123000.00 bonds outstanding with a current price of $1,141.00. The outstanding bonds have yield to maturity 7.16%. The firm's common stock beta is 2.185 and the corporate tax rate is 35.00%. The expected market return is 10.23% and the T-bill rate is 5.69%. 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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