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Suppose a firm has 42 million shares of common stock outstanding at a price of $50 per share. The firm also has 300,000 bonds outstanding
Suppose a firm has 42 million shares of common stock outstanding at a price of $50 per share. The firm also has 300,000 bonds outstanding with a current price of $1006.3. The outstanding bonds have yield to maturity 9.6%. The firm's common stock beta is 1.6 and the corporate tax rate is 35%. The expected market return is 13% and the T-bill rate is 2%. What is the WACC for this firm? Weight of Equity (3 decimals): Weight of Debt (3 decimals): Cost of Equity (3 decimals): After tax Cost of Debt (3 decimals): WACC (3 decimals)
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