Problem 18-3 WACC Consider the following information for Federated Junkyards of America. Debt: $75,000,000 book value...
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Problem 18-3 WACC Consider the following information for Federated Junkyards of America. Debt: $75,000,000 book value outstanding. The debt is trading at 90% of book value. The yield to maturity is 9%. Equity: 2,500,000 shares selling at $42 per share. Assume the expected rate of return on Federated's stock is 18%. Taxes: Federated's marginal tax rate is Tc = 0.21. Calculate the weighted-average cost of capital (WACC). Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Weighted-average cost of capital % Problem 18-3 WACC Consider the following information for Federated Junkyards of America. Debt: $75,000,000 book value outstanding. The debt is trading at 90% of book value. The yield to maturity is 9%. Equity: 2,500,000 shares selling at $42 per share. Assume the expected rate of return on Federated's stock is 18%. Taxes: Federated's marginal tax rate is Tc = 0.21. Calculate the weighted-average cost of capital (WACC). Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Weighted-average cost of capital %
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