PTS Question 2 10 Below is information for ThreadCo. Calculate the firm's cost of equity, the cost of debt, and the weighted average cost of capital (WACC) ThreadCo common stock beta: 0.83 Cost of equity Weight of equity YTM on 10-year US Treasury bond: 3.12% Average annual return on Vanguard Total Market Fund: 10.55% Pre-tax cost of debt Current ThreadCo price per common share: 34.65 Weight of debt WACC 45 Number of ThreadCo common shares outstanding (in millions): Corporate tax rate: 20% Market Price Quote (per Bond issue bond) A 99.3500 B 98.6700 99.3600 101.2100 100.0800 94.3500 101.2500 C D E F G Coupon Rate 4.250% 4.750% 5.000% 6.000% 6.500% 5.500% 7.000% Book Value (in millions $) 20 20 55 80 90 25 10 YTM 4.9241% 5.4610 % 5.2333 % 5.6577% 6.4810 % 6.6576% 6.7728% ThreadCo common stock beta: YTM on 10-year US Treasury bond: Average annual return on Vanguard Total Market Fund: Current ThreadCo price per common share: Number of ThreadCo common shares outstanding (in millions): Corporate tax rate: Bond issue A B C DEFG 0.83 3.12% 10.55% 34.65 45 20% Coupon Rate 4.250% 4.750% 5.000% 6.000% 6.500% 5.500% 7.000% Book Value (in millions $) Cost of equity Weight of equity Pre-tax cost of debt Weight of debt WACC Market Price Quote (per bond) 99.3500 98.6700 99.3600 101.2100 100.0800 94.3500 101.2500 20 20 55 80 90 25 10 YTM 4.9241% 5.4610 % 5.2333% 5.6577% 6.4810 % 6.6576% 6.7728% 5 Question 2 Below is information for ThreadCo. Calculate the firm's cost of equity, the cost of debt, and the weighted average cost of capital (WACC)