Aaron's Rentals has 50,000 shares of common stock outstanding at a market price of $38 a share.
Fantastic news! We've Found the answer you've been seeking!
Question:
Aaron's Rentals has 50,000 shares of common stock outstanding at a market price of $38 a share. The company has a beta of 1.2 and the market risk premium is 8%, with risk free rate of 3.5%. The outstanding bonds mature in 10 years, have a total face value of $800,000, a face value per bond of $1,000, and a market price of $987.60 each. The bonds pay 6% coupon. The tax rate is 30 percent. What is the firm's weighted average cost of capital?
Related Book For
Horngrens Financial And Managerial Accounting The Financial Chapters
ISBN: 9780134486840
6th Edition
Authors: Tracie L. Miller Nobles, Brenda L. Mattison, Ella Mae Matsumura
Posted Date: