22 of 30 Texas Corporation has an effective annual WACC of 9.60%. It is financed with...
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22 of 30 Texas Corporation has an effective annual WACC of 9.60%. It is financed with 40% debt and 60% equity. Texas's effective annual cost of equity is 12.80% and its corporate tax rate is 40%. All debt issued by Texas is a 25-year bond, paying coupon annually at a coupon rate of 8%. The bond has a face value of $1,000. What is the price of the Texas bond? (Please retain at least 4 decimal places in your calculations.) O a. $1,076.74 Ob. $852.46 O c. $1,017.67 O d. $987.63 O e. $1,000 2.5 Marks Unsure 22 of 30 Texas Corporation has an effective annual WACC of 9.60%. It is financed with 40% debt and 60% equity. Texas's effective annual cost of equity is 12.80% and its corporate tax rate is 40%. All debt issued by Texas is a 25-year bond, paying coupon annually at a coupon rate of 8%. The bond has a face value of $1,000. What is the price of the Texas bond? (Please retain at least 4 decimal places in your calculations.) O a. $1,076.74 Ob. $852.46 O c. $1,017.67 O d. $987.63 O e. $1,000 2.5 Marks Unsure
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