QUESTION 14 Maumme Inc. recently hired you as a consultant to estimate the company's WACC. You have obtained the following information. (1) The firm's noncallable bonds mature in 20 years, have an 6.00% semi-annual coupon, a par value of $1,000, and a market price of $1,175.00. (2) The company's tax rate is 25%. (3) The risk-free rate is 2.50%, the market risk premium is 5.50%, and the stock's beta is 1.20. (4) The target capital structure consists of 35% debt and the rest is common equity. The firm uses the CAPM to estimate the cost of equity, and it does not expect to issue any new common stock. What is its WACC? TTT Arial 3 (12pt) T. i Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save All O Il e E 99 DELL F FB FAV # & 3 4. 5 6 7 9 E R T Y D F. G . J Question Completion Status: Toledo Inc.'s bonds currently sell for $1,200. They pay a $90 annual coupon, have a 25-year maturity, and a $1,000 par value, but they can be called in 5 years at call price of $1,056. Assume that no costs other than the call premium would be incurred to call and refund the bonds, and also assume that the yield curve is horizontal, with rates expected to remain at current levels on into the future. What is the difference between this bond's YTM and its YTC? TTT Arial 3 (12pt) T.EE Click Save and Submit to save and submit. Click Save All Answers to save all answers Save All o E 99+ DOLL Priser 3 FB F3 A & * % 5 3 LO 7 8 E R . D F G H J K Question Completion Status: QUESTION 16 NADA INC's stock had a required return of 11.00% last year, when the risk-free rate was 2.0% and the market risk premium was 4.75%. Then an increase in investor risk aversion caused the market risk premium to rise by 2.5% The risk-free rate and the firm's beta remain unchanged. What is the company's new required rate of return? (Hint: First, calculate the beta, and then find the required return.) Do not round your intermediate calculations. TTT Arial 3 (12pt) T -- Path: P Words Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save All i 99 DELL p Priser EM F7 FO FVO $ % & 3 4 5 7 8 E R T D F. G H J K