Kawasaki wants to know the WACC of the company where he is considering investing. This company has
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Kawasaki wants to know the WACC of the company where he is considering investing. This company has $120 million face value of outstanding debt with a coupon of 12% and a yield to maturity of 10% (annualized). The bonds make semi-annual payments and have 9 years to maturity. The company also has 800,000 shares of common stock with book value per share of $42 and a market value per share of $60. The current cost of equity of the company is 14.5%. Additionally, the company is in the 30% tax bracket.
What is the current weighted average cost of capital of this company?
Related Book For
Fundamentals Of Corporate Finance
ISBN: 9780135811603
5th Edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
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