Golden Eagle has 1,250 bonds outstanding with a market value of $980 each. The pretax cost...

 

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Golden Eagle has 1,250 bonds outstanding with a market value of $980 each. The pretax cost of debt is 7.2 percent. The firm also has 46,000 shares of common stock outstanding at a price per share of $32 and a beta of 1.21. The risk-free rate is 2.4 percent, the market risk premium is 7.3 percent, and the tax rate is 34 percent. What is the company's WACC? Golden Eagle has 1,250 bonds outstanding with a market value of $980 each. The pretax cost of debt is 7.2 percent. The firm also has 46,000 shares of common stock outstanding at a price per share of $32 and a beta of 1.21. The risk-free rate is 2.4 percent, the market risk premium is 7.3 percent, and the tax rate is 34 percent. What is the company's WACC?

Answer rating: 100% (QA)

To calculate the weighted average cost of capital WACC for Golden Eagle we need to follow these step... View the full answer