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You are estimating the weighted average cost of capital (WACC) for your company based on the following information: Equity information. Debt information 50 million
You are estimating the weighted average cost of capital (WACC) for your company based on the following information: Equity information. Debt information 50 million common shares outstanding $1 billion of debt at face value $80 market price per share Stock beta of 1.15 Market risk premium of 9% Risk-free rate of 5% Debt quoted price = 110 Coupon rate=9%, semi-annual 15 years to maturity Marginal tax rate of 40% Calculate the following returns: (1/100 of one percent without % sign, e.g. 12.671, if a negative percentage, -9.56). 1. Cost of equity (%): 15.35 2. Cost of debt (%): 3. Proportion of debt (%): 4. Proportion of equity (%): 5. Weighted average cost of capital (%):
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