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WACC Compare Trout, Inc. with Salmon Enterprises, using the balance sheet of Trout and the market data of Salmon for the weights in the weighted
WACC Compare Trout, Inc. with Salmon Enterprises, using the balance sheet of Trout and the market data of Salmon for the weights in the weighted average cost of capital. Trout, Inc.: Current Assets: $2,000,000 Current Liabilities: $1,000,000 Long-term Assets: $7,000,000 Long-Term Liabilities: $5,000,000 Owner's Equity: $3,000,000 Salmon Enterprises Bonds Outstanding 3,000 selling at $980 Common Stock Outstanding 260,000 selling at $23.40 If the after-tax cost of debt is 8% for both companies and the cost of equity is 12%. The tax rate is 24%. Question: 1. The weight Trout's debt component is % 2. WACC for Trout is 3. Adjusted WACC for Trout % 4. Debt value of Salmon is $ 5. Weight of equity for Salmon is 6. WACC for Salmon is %. 7. Adjusted WACC for Salmon
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