Question
Suppose a firm has 11.80 million shares of common stock outstanding at a price of $28.50 per share. The firm also has 129000.00 bonds outstanding
Suppose a firm has 11.80 million shares of common stock outstanding at a price of $28.50 per share. The firm also has 129000.00 bonds outstanding with a current price of $941.00. The outstanding bonds have yield to maturity 10.19%. The firm's common stock beta is 1.48 and the corporate tax rate is 36.00%. The expected market return is 13.94% and the T-bill rate is 1.53%. Compute the following:
- Weight of Equity of the firm:
- Weight of Debt of the firm:
- Cost of Equity of the firm:
- After Tax Cost of Debt of the firm:
- WACC for the Firm:
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Principles Of Managerial Finance
Authors: Lawrence J. Gitman, Chad J. Zutter
13th Edition
