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Suppose a firm has 34 million shares of common stock outstanding at a price of $15.5 per share. The firm also has 100,000 bonds outstanding
Suppose a firm has 34 million shares of common stock outstanding at a price of $15.5 per share. The firm also has 100,000 bonds outstanding with a current price of $1171.1. The outstanding bonds have yield to maturity 7.8%. The firm's common stock beta is 2.5 and the corporate tax rate is 38%. The expected market return is 12% and the T-bill rate is 1%. 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):
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