Appen Ltd. has an outstanding bond issue that the company sold 5 years ago for $50 million.
Fantastic news! We've Found the answer you've been seeking!
Question:
Appen Ltd. has an outstanding bond issue that the company sold 5 years ago for $50 million. The market value of these bonds today is $38 million. The effective annual yield on these bonds is 7.75%. The company has also 17.5 million ordinary shares outstanding with a current price of $16 per share. The Beta of the ordinary share is 1.9, the market risk premium is 8% and the risk-free rate is 1.5%. Appen Ltd. has a 30% corporate tax rate.
Compute Appen Ltd's weighted average cost of capital (WACC).
Related Book For
Financial Accounting an introduction to concepts, methods and uses
ISBN: 978-0324789003
13th Edition
Authors: Clyde P. Stickney, Roman L. Weil, Katherine Schipper, Jennifer Francis
Posted Date: