Chubby Bunny Store recently issues 30-year, 10% coupon bonds and a par value of $1,000, selling...

 

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Chubby Bunny Store recently issues 30-year, 10% coupon bonds and a par value of $1,000, selling for $1,080. Risk free rate is 3%; the firm's beta = 1.4; and the market return equals 12%. What is their WACC given tax rate is 21% and they have $55,000 in debt and $70,000 in equity? Chubby Bunny Store recently issues 30-year, 10% coupon bonds and a par value of $1,000, selling for $1,080. Risk free rate is 3%; the firm's beta = 1.4; and the market return equals 12%. What is their WACC given tax rate is 21% and they have $55,000 in debt and $70,000 in equity?

Answer rating: 100% (QA)

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