Consider the following information for a company: the firm has 25 million shares, and 50 million in

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Consider the following information for a company: the firm has 25 million shares, and 50 million in outstanding debt (a bond that pays no coupons). The face value of a bond is 100, its current market price is 95, and there is one year remaining to maturity. The stock price of the company is 6 per share. The beta of the company is 0.85. The market risk premium is 5%, and the risk-free rate is 3%. The company's tax rate is 24%. What is the company's weighted average cost of capital (WACC)? Enter your answer as a decimal number with three significant digits. For example, if you find the WACC to be 1.234%, enter 0.0123.

Posted Date: May 13, 2024 07:35 AM

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Consider the following information for a company: the firm has 25 million shares, and 50 million in

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To calculate the weighted average cost of capital WACC we need to consider the cost of equity and th... View the full answer

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