ABC Corp has a market value of debt to equity ratio of 1.50e, market value of debt to market value of equity ratio 1.5). Its book value of debt to equity ratio (book value of debt to book value of equity) is 0.5. The firm's bonds have a low credit rating with an annual coupon rate of 8%. The current yield to maturity of its bonds is 11%. The company has an equity beta of 1.5 and a debt beta of 0.4 Assume that the risk-free interest rate is 1% and expected market risk premium is 5% ABC Corp. faces a tax rate of 21%. Suppose ta management is considering a project that has the same risk and same financing mix as the firm The cost of capital for the project is Instruction Type ONLY your numerical answer in the unit of percentage % sign is already there. Thus, so don't input the % sign Round to the nearest two decimal places Eg. your answer is 10.130%, then input 10.14

TT Industries is trading for $20 per share and has 25 million shares outstanding. TT Industries has a debt-equity ratio of 0.4 and its debt is zero coupon debt with a ten-year maturity and a yield to maturity of 8%.   Which of the following best describes TT's debt using a put option? A) Short $200 million in risk-free debt and Long a put option on the firm's assets with a $200 strike price B) Long $200 million in risk-free debt and Short a put option on the firm's assets with a $700 strike price C) Long $200 million in risk-free debt and Short a put option on the firm's assets with a $200 strike price D) Short $200 million in risk-free debt and Long a put option on the firm's assets with a $700 strike price

Epson has one bond outstanding with a yield to maturity of 5% and a coupon rate of 8%. The company has no preferred stock. Epson's beta is 1.5, the risk-free rate is 2.2% and the expected market risk premium is 6%. Epson has a target debt/equity ratio of 0.7 and a marginal tax rate of 34%. 1. What is Epson's (pre-tax) cost of debt? 2. What is Epson's cost of equity? 3.  What is Epson's capital structure weight for equity, i.e., the fraction of long-term capital provided by equity? 4. What is Epson's weighted average cost of capital?

XYZ Corp. has bonds outstanding with a coupon rate of 2% and a YTM of 5.7%. The risk - free rate of return is 2.2% and the market is returning 10.0%. The stock has a beta of 0.9 and the firm is financed with 45% debt and 55% equity. If the tax rate is 24%, what is XYZ's WACC?