Justin Bieber has a tax rate of 35%. The par value for each of its bonds is
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Justin Bieber has a tax rate of 35%. The par value for each of its bonds is $1,000. The bonds have 15 years to maturity and currently selling at 93% of their par value with a yield to maturity of 9.38%. It has 9 million shares of common stocks outstanding and 120,000 bonds outstanding. The common stocks are currently selling for $34 per share and has a beta of 1.2. The market risk premium is 10%, T-bill rate is 5%. What is your company's weighted average cost of capital?
Related Book For
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
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