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Wyatt's Widgets provides the following information about its stocks and bonds: Bonds: 25,000 bonds outstanding, $1,000 par value, 4.0% annual coupon rate, 10 years to
Wyatt's Widgets provides the following information about its stocks and bonds: Bonds: 25,000 bonds outstanding, $1,000 par value, 4.0% annual coupon rate, 10 years to maturity. Shares: 10,000,000 shares outstanding, beta = 1.25. If the risk-free rate is 2%, the market risk premium is 8%, Wyatt's marginal tax rate is 25%, and Wyatt's bonds and stocks currently sell for $1,016.38 and $12.46, respectively, what is Wyatt's capital structure? 16.9% debt and 83.1% equity 71.4% debt and 28.6% equity 25.0% debt and 75.0% equity 0.2% debt and 99.8% equity
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