Blueberry (BB) is a firm producing fruit juice and fruit-based health food. It was recently given a
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Blueberry (BB) is a firm producing fruit juice and fruit-based health food. It was recently given a rating of A by Moody's and has a credit spread of 2.7% on its debt. The firm finances its operations with both debt and equity. BB's book value of debt is $60 million, currently trading at 115% of par value. The firm has book equity of $65 million, and 3 million shares trading at $24 per share. The firm's beta is 1.1, the return on the market portfolio is E(Rmarket ) = 8.5%, and the risk-free rate is 3.5%, while the corporate tax rate is 25%.
What is the weighted average cost of capital of BB ?
Related Book For
Fundamentals of Financial Management
ISBN: 978-0324597707
12th edition
Authors: Eugene F. Brigham, Joel F. Houston
Posted Date: