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QUESTION 1 Suppose Corporation A has a book (face) debt value of $20 Million USD, trading at 60% of its face value. It also has
QUESTION 1 "Suppose Corporation A has a book (face) debt value of $20 Million USD, trading at 60% of its face value. It also has book equity of $15 Million USD, and 5 Million shares of common stock trading at $20 per share. What weights should Corporation A use for Debt capital when calculating its WACC? Express your answers in strictly numerical terms. For example, if the answer is 5%, write 0.05" QUESTION 2 "Suppose Corporation A has a book (face) debt value of $20 Million USD, trading at 60% of its face value. It also has book equity of $15 Million USD, and 5 Million shares of common stock trading at $20 per share. What weights should Corporation A use for Equity capital when calculating its WACC? Express your answers in strictly numerical terms. For example, if the answer is 5%, write 0.05" QUESTION 3 "Last year Firm D had a weighted interest rate of debt of 8%. If the corporate tax was 25% for that firm. What was the after tax interest rate on debt for firm D? Express your answers in strictly numerical terms. For example, if the answer is 5%, write 0.05
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