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The current market value of Geraldo Auto Designs long-term debt is $350,000. The common stock price is $20 per share and there are 30,000 shares
The current market value of Geraldo Auto Designs long-term debt is $350,000. The common stock price is $20 per share and there are 30,000 shares outstanding. Assume an after-tax cost of new debt of 8.63 percent and a cost of common equity of 16.5 percent. Calculate the WACC using market value weights and the component capital costs.
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Financial Reporting and Analysis
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer
7th edition
1259722651, 978-1259722653
