Question
Siara Vehicle Inc, UK has 90,000 bonds outstanding that are selling at par. Bonds with similar characteristics are yielding 7%. The company also has 800,000
Siara Vehicle Inc, UK has 90,000 bonds outstanding that are selling at par. Bonds with similar characteristics are yielding 7%. The company also has 800,000 shares of 8% preferred stock and 2.6 million shares of common stock outstanding. The preferred stock sells for 55 S a share. The common stock has a beta of 1.40 and sells for 42 a share. The UK Treasury bill is yielding 3% and the return on the market is 12 %. The corporate tax rate is 40%.
(I) What are the costs of debt and equity?
- What is the total value of the firm?
- What is the firm's weighted average cost of capital (WACC)?
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Adventure Capitalist The Ultimate Road Trip
Authors: Jim Rogers
1st Edition
0375509127, 978-0375509124
