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TTT is currently financed with $300 million of debt in the form of bonds and $700 million of equity. Each bond has a $1,000 face
TTT is currently financed with $300 million of debt in the form of bonds and $700 million of equity. Each bond has a $1,000 face value, a current market value of $779.26, 18 years to maturity and carries a coupon rate of 8% with coupons paid semi-annually. TTTs beta of equity, = 1.4. Assume all cash flows occur at the end of each year, TTTs corporate tax rate is 40%, the T-bill rate is 6%, the expected return to the market portfolio is 16%, and the CAPM is true. Calculate the WACC of TTT.
TTT is currently financed with $300 million of debt in the form of bonds and $700 million of equity. Each bond has a S1,000 face value, a current market value of S779.26, 18 years to maturity and carries a coupon rate of 8% with coupons paid semi-annually-TTT's beta of equity, = 1.4. Assume all cash flows occur at the end of each year, TTT's corporate tax rate is 40%, the T-bill rate is 6%, the expected return to the market portfolio is 16%, and the CAPM is true. Calculate the WACC of TTI
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