Question
Suppose a firm has 26.10 million shares of common stock outstanding at a price of $23.59 per share. The firm also has 277000.00 bonds outstanding
Suppose a firm has 26.10 million shares of common stock outstanding at a price of $23.59 per share. The firm also has 277000.00 bonds outstanding with a current price of $1,046.00. The outstanding bonds have yield to maturity 10.60%. The firm's common stock beta is 1.09 and the corporate tax rate is 36.00%. The expected market return is 9.14% and the T-bill rate is 5.52%. 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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