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RON Ltd has the following capital structure components: Five million shares issued with a current market price of 7. Equity holders require a 9% return.
RON Ltd has the following capital structure components:
- Five million shares issued with a current market price of 7. Equity holders require a 9% return.
- $10 million face value of Corporate bonds outstanding. These bonds pay an annual coupon of 6% and currently trade at a yield to maturity of 6%.
If the firm faces a corporate tax rate of 30%, what is RON Ltd's Weighted Average Cost of Capital (WACC) in decimal form to four decimal places?
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Financial Management For Public Health And Not For Profit Organizations
Authors: Steven A. Finkler
2nd Edition
0131471988, 978-0131471986
