Question: A firm has 2 , 0 0 0 , 0 0 0 shares of common stock outstanding with a market price of $ 3 per

A firm has 2,000,000 shares of common stock outstanding with a market price of $3 per share. It has 2,000 bonds outstanding, each selling for $1,120. The bonds mature in 15 years, have a coupon rate of 10%, and pay coupons annually. The firm's beta is 1.2, the risk free rate is 5%, and the market risk premium is 7%. The tax rate is 30%. What is its WACC?
Multiple Choice
10.98%
11.38%
11.66%
11.11%
8.55%

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!