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Question 6. The Riddle Corp. have the following financing outstanding. Debt: 20,000 bonds with a coupon rate of 12 percent and a current price quote
Question 6. The Riddle Corp. have the following financing outstanding. Debt: 20,000 bonds with a coupon rate of 12 percent and a current price quote of 110.0; the bonds have 20 years to maturity. 190,000 zero coupon bonds with a price quote of 20.5 and 30 years until maturity. Preferred stock: 110,000 shares of 10 percent preferred stock with a current price of $85, and a par value of $100. Common stock: 2,200,000 shares of common stock; the current price is $71, and the beta of the stock is 1.45. Market: The corporate tax rate is 30 percent, the market risk premium is 5 percent, and the risk-free rate is 2 percent. What is the WACC for the company
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