Question: PLEASE HELP ASAP ILL RATE goodlier The total book value of WTCs equity is $8 million, and book value per share is $20. The stock

PLEASE HELP ASAP ILL RATE goodlier

The total book value of WTCs equity is $8 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 13%. 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 10%, and the firms tax rate is 21%. What is the companys WACC? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Examine the following book-value balance sheet for University Products Inc. The preferred stock currently sells for $15 per share and pays a dividend of $3 a share. The common stock sells for $20 per share and has a beta of 0.8. There are 2 million common shares outstanding. The market risk premium is 10%, the risk-free rate is 5%, and the firms tax rate is 21%.

BOOK-VALUE BALANCE SHEET
(Figures in $ millions)
Assets Liabilities and Net Worth
Cash and short-term securities $ 2.0 Bonds, coupon = 5%, paid annually (maturity = 10 years, current yield to maturity = 6%) $ 10.0
Accounts receivable 6.0 Preferred stock (par value $10 per share) 3.0
Inventories 10.0 Common stock (par value $0.10) 0.2
Plant and equipment 23.0 Additional paid-in stockholders equity 19.8
Retained earnings 8.0
Total $ 41.0 Total $ 41.0

a. What is the market debt-to-value ratio of the firm?

b. What is Universitys WACC?

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