Question
Suppose a firm has 21 million shares of common stock outstanding at a price of $10.1 per share. The firm also has 400,000 bonds outstanding
Suppose a firm has 21 million shares of common stock outstanding at a price of $10.1 per share. The firm also has 400,000 bonds outstanding with a current price of $1180.3. The outstanding bonds have yield to maturity 9.7%. The firm's common stock beta is 1.2 and the corporate tax rate is 40%. The expected market return is 12% and the T-bill rate is 3%. What is the WACC for this firm?
Weight of Equity (3 decimals):
Weight of Debt (3 decimals):
Cost of Equity (4 decimals):
After tax Cost of Debt (4 decimals):
WACC (4 decimals):
Can you help me out by showing me the formulas and how to do it
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