Question: No maximum/minimum word count. But the calculations should be shortly explained. Font: Arial 12,5 pts. Text alignment: Justified. The in-text References and the Bibliography have

No maximum/minimum word count. But the calculations should be shortly explained. Font: Arial 12,5 pts. Text alignment: Justified. The in-text References and the Bibliography have to be in Harvards citation style It assesses the following learning outcomes: Demonstrate a deep understanding of the theory and practices of financing a firm and its capital structure. Discuss and analyze the benefits of leasing versus the ownership of assets. Analyze the concepts underlying the WACC Critically evaluate dividend policy

Problem 3 (25 points) The total book value of WTCs equity is $10 million, and book value per share is $20. The stock has a market-to-book ratio of 1.5, and the cost of equity is 15%. The firms bonds have a face value of $5 million and sell at a price of 110% of face value. The yield to maturity on the bonds is 9%, and the firms tax rate is 40%. Find the companys WACC.

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