XYZ Corp issued bonds with a face value of 4 million and a 7% annual coupon. The bonds mature in 8 years and the yield to maturity if %5. XYZ has 800000 shares outstanding trading at $6.50 per share. The shares have a book value of $4 million. XYZ is calculating its weighted average cost of capital (WACC)

What is the value of debt that XYZ should use in its WACC calculation? What is the weight for debt that XYZ should use in its WACC calculation?

Answer rating: 100% (QA)

Calculating the value of debt and its weight for WACC 1 Market Value of Debt The face value of the d... View the full answer