You are provided with the following information for the GHJ company: The current share price is 5.30.

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You are provided with the following information for the GHJ company:

The current share price is 5.30. There are currently 3 million shares in issue.

The cost of equity capital is 15%.

The company has debt capital with a face value of 100 per unit and a total face value of 10million.

The loan stock is currently selling at 141 per unit.

The cost of debt capital is 11%.

Calculate the WACC for GHJ.Assume there are no taxes and no bankruptcy costs.

Using the information provided in question 4, now calculate the WACC for GHJ ifthere is a corporate profits tax of45% and debt capital is tax deductible. Assume all other details inquestion 4remain unchanged.

Posted Date: May 19, 2024 11:14 AM

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You are provided with the following information for the GHJ company: The current share price is 5.30.

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