Question
Your firm is 50% debt finance and 50% equity financed and faces a 40% marginal tax rate. Your firms bonds have 9 years remaining until
Your firm is 50% debt finance and 50% equity financed and faces a 40% marginal tax rate. Your firms bonds have 9 years remaining until maturity, a coupon rate of 5% with semiannual payments and are currently selling for $980.
The 3 month T-bill rate is .25%, the S&P 500 is returning 7% and your firms beta is 1.1.
Calculate the WACC
| Wd |
| We |
| Rd=CPR |
| Re |
| WACC |
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Passive Income The Passive Income Millionaire
Authors: Alexus Arellano
1st Edition
9814950882, 978-9814950886
