Question: Compare Trout Inc with Salmon Enterprises using the balance sheet

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


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?
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  • CreatedMay 08, 2014
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