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Suppose a Company has two classes of securities: long-term bonds and common stock. The bonds have a a total par value of $555 million, a
Suppose a Company has two classes of securities: long-term bonds and common stock. The bonds have a a total par value of $555 million, a market price of 105.7% of par, and a yield-to-maturity of 6.3%. The stock has 58 million shares outstanding, a current market price of $25, and an expected rate of return according to the CAPM of 10.4%. The firm's tax rate is 22%. What is the firm's WACC? Enter your answer as a decimal and show four decimal places. For example, if your answer is 9.25%, enter .0925.
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