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The Anson Jackson Court (AJC) currently has $200,000 market value and book value) of perpetual debt outstanding carrying a coupon rate of 4%. Its earnings
The Anson Jackson Court (AJC) currently has $200,000 market value and book value) of perpetual debt outstanding carrying a coupon rate of 4%. Its earnings before interest and taxes (EBIT) are $89,000, and it is a zero growth company. AJC's current cost of equity is 8%, and its tax rate is 25%. The firm has 10,000 shares of common stock outstanding selling at a price per share of $60.00. Refer to the data for the Anson Jackson Court Company (AJC). What is AJC's current total market value and weighted average cost of capital? a. $650,000; 7.90% b. $800,000; 7.90% c. $800,000; 7.40% d. $800,000; 6.75% e. $650,000; 6.75%
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