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Suppose a firm has 49.70 million shares of common stock outstanding at a price of $45.73 per share. The firm also has 489000.00 bonds outstanding
Suppose a firm has 49.70 million shares of common stock outstanding at a price of $45.73 per share. The firm also has 489000.00 bonds outstanding with a current price of $1,167.00. The outstanding bonds have yield to maturity 7.00%. The firm's common stock beta is 2.14 and the corporate tax rate is 38.00%. The expected market return is 14.83% and the T-bill rate is 5.04%. Compute the following:
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