The company issued 240,000 bonds. The bonds have a $1,000 face value with 9.5% coupons with annual
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The company issued 240,000 bonds. The bonds have a $1,000 face value with 9.5% coupons with annual payments, 22 years to maturity, and currently sell for $940. The marginal tax rate is 5%.
Equity: The company has 9,000,000 shares of (common) stock outstanding, selling for $75 per share. The company's beta is 1.1, the risk free rate is 1%, and the market risk premium is 9%.
2a. What percent of the company's financing is debt?
2b. What percent of the company's financing is equity?
Related Book For
Canadian Income Taxation Planning And Decision Making
ISBN: 9781259094330
17th Edition 2014-2015 Version
Authors: Joan Kitunen, William Buckwold
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