Question
the company has 80000 shares of common stock outstanding at a current market price $29 per share. the stock has a beta of 1.2. the
the company has 80000 shares of common stock outstanding at a current market price $29 per share. the stock has a beta of 1.2. the market risk premium is 6% and the risk free rate is 3%.
the company has 2000bonds outstanding with 6% coupon and 20years to maturiry. the bond is currently selling for $1103.8 with a yield-to-maturity of 5%
the tax rate for the company is 20%
(a)what is the cost of equity for the company?
(b)what is the weighted average cost of capital for the company?
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Investments An Introduction
Authors: Herbert B Mayo
9th Edition
324561385, 978-0324561388
