Compare Trout Inc. with Salmon Enterprises using the balance sheet of Trout and the market data of

Question:

Compare Trout Inc. with Salmon Enterprises using the of Trout and the market data of Salmon for the weights in the weighted average cost of capital.

Compare Trout Inc. with Salmon Enterprises using the balance sheet

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% which company has the highestWACC?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Cost Of Debt
The cost of debt is the effective interest rate a company pays on its debts. It’s the cost of debt, such as bonds and loans, among others. The cost of debt often refers to before-tax cost of debt, which is the company's cost of debt before taking... Cost Of Equity
The cost of equity is the return a company requires to decide if an investment meets capital return requirements. Firms often use it as a capital budgeting threshold for the required rate of return. A firm's cost of equity represents the...