Splash has 2 million shares outstanding each priced at $160, $180 million bonds outstanding, and no preferred stocks. Splashes bonds have yield to maturity of 8%. Splash is beta is 1.7 and its marginal tax rate is 21%. The market risk premium is 11% and the annual risk-free rate is 2%. 

a) What is splash's capital structure weights for equity and debt?

b) What is Splash's cost of equity?

c) What is Splash's WACC?

Answer rating: 100% (QA)

a The capital structure weights for equity and debt are calculated as follows Weight of Equity Mark... View the full answer