The company issued 240,000 bonds. The bonds have a $1,000 face value with 9.5% coupons with annual payments, 22 years to maturity, and currently sell for $940. The marginal tax rate is 5%.

 

Equity: The company has 9,000,000 shares of (common) stock outstanding, selling for $75 per share. The company's beta is 1.1, the risk free rate is 1%, and the market risk premium is 9%.

 

2a. What percent of the company's financing is debt?

2b. What percent of the company's financing is equity?

Answer rating: 100% (QA)

2a To calculate the percent of the companys financing that is debt we need to first calculate the to... View the full answer