Question
You've been hired as an analyst for JB Spy Company. They would like you to provide them a current view of their capital structure (in
You've been hired as an analyst for JB Spy Company. They would like you to provide them a current view of their capital structure (in other words what is the weights that would be used in a WACC formula?) given the following information:
stock price in the market currently is $54 bonds have a par value of $1,000
tax rate is 35%
number of shares of stock outstanding is 200,000 number of bonds issued and outstanding is 9,000
bonds are currently selling at 98 in the market
they pay dividends of $2.00 per year
the market premium is currently 7%
What weights should be used for the WACC formula?
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