Question
Suppose a firm has 12.00 million shares of common stock outstanding at a price of $25.86 per share. The firm also has 359000.00 bonds
Suppose a firm has 12.00 million shares of common stock outstanding at a price of $25.86 per share. The firm also has 359000.00 bonds outstanding with a current price of $940.00. The outstanding bonds have yield to maturity 7.28%. The firm's common stock beta is 2.32 and the corporate tax rate is 35.00%. The expected market return is 9.36% and the T-bill rate is 5.32%. Compute the following: A. Weight of Equity of the firm: B. Weight of Debt of the firm: C. Cost of Equity of the firm: D. After Tax Cost of Debt of the firm: E. WACC for the Firm:
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