Question
The total book value of WTCs equity is $12 million, and book value per share is $24. The stock has a market-to-book ratio of 1.5,
The total book value of WTCs equity is $12 million, and book value per share is $24. The stock has a market-to-book ratio of 1.5, and the cost of equity is 14%. The firms bonds have a face value of $8 million and sell at a price of 110% of face value. The yield to maturity on the bonds is 9%, and the firms tax rate is 40%. What is the companys WACC?
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The Handbook Of Financing Growth
Authors: Kenneth H. Marks, Larry E. Robbins, Gonzalo Fernandez, John P. Funkhouser, D. L. Williams
2nd Edition
0470390158, 978-0470390153
