Raspberry Corporation has 4 million ordinary shares outstanding that are currently priced at $8.50 each and have
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Question:
Raspberry Corporation has 4 million ordinary shares outstanding that are currently priced at $8.50 each and have a beta of 1.4. The company has 500,000 preference shares trading at $6 each. The market yield on the preference shares is 5% per annum. The company's bonds have a total market value of $6,500,000, have a coupon rate of 4% p.a. and current yield to maturity is 3% per annum. The market risk premium is 6.5% p.a., the risk-free rate is 2% p.a., and the company tax rate is 30%.
What is Raspberry Corporation’s WACC?
Related Book For
Foundations of Financial Management
ISBN: 978-1259194078
15th edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen
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