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Rollings Corporation is constructing its MCC schedule. Its target capital structure is 50% debt and 50% common equity. Its bond carries a 10% coupon rate,
Rollings Corporation is constructing its MCC schedule. Its target capital structure is 50% debt and 50% common equity. Its bond carries a 10% coupon rate, and it pays interest semiannually. The bond matures in 15 years and sells for a net price of $960.00. The firm's marginal tax rate is 25%.
A)What is the cost of debt before and after tax?
b) what is the cost of new Common Stock financing?
c) what is the WACC using debt & equity to finance.
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