Question: When inputting an answer, round your answer to the nearest 2 decimal places. If you need to use a calculated number for further calculations, DO
When inputting an answer, round your answer to the nearest 2 decimal places. If you need to use a calculated number for further calculations, DO NOT round until after all calculations have been completed. For the final answer, Round to 2 decimal places.
| Q1) Suppose a firm has 18.60 million shares of common stock outstanding at a price of $43.71 per share. The firm also has 495000.00 bonds outstanding with a current price of $1,122.00. The outstanding bonds have yield to maturity 6.11%. The firm's common stock beta is 1.481 and the corporate tax rate is 35.00%. The expected market return is 11.86% and the T-bill rate is 4.63%. Compute the following: |
| a) Weight of Equity of the firm (2 points) |
| b) Weight of Debt of the firm (2 points) |
| c) Cost of Equity of the firm (2 points) |
| d) After Tax Cost of Debt of the firm (2 points) |
| e) WACC for the Firm (2 points) |
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