Cunningham Corporation currently has 2 million equity shares outstanding trading at a price of $5 per share with a beta of 1.5. In addition, they have $3 million in outstanding debt ($3.3 million in current market value) with a current market value of $1100, a coupon rate of 6 percent (annual payments), and 8 years to maturity. If the market risk premium is 7 percent, the risk free rate is 2.5 percent, and the appropriate tax rate is 18 percent, what is Cunningham Corporation's WACC? Group of answer choices 12.51 percent 11.58 percent 11.00 percent 10.69 percent 7.86 percent
Cunningham Corporation currently has 2 million equity shares outstanding trading at a price of $5 per share with a beta of 1.5. In addition, they have $3 million in outstanding debt ($3.3 million in current market value) with a current market value of $1100, a coupon rate of 6 percent (annual payments), and 8 years to maturity. If the market risk premium is 7 percent, the risk free rate is 2.5 percent, and the appropriate tax rate is 18 percent, what is Cunningham Corporation's WACC? Group of answer choices 12.51 percent 11.58 percent 11.00 percent 10.69 percent 7.86 percent
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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am. 33.
Transcribed Image Text:Cunningham Corporation currently has 2 million equity shares outstanding trading at a price of $5 per share with a beta of 1.5. In addition, they have $3 million in
outstanding debt ($3.3 million in current market value) with a current market value of $1100, a coupon rate of 6 percent (annual payments), and 8 years to maturity. If the
market risk premium is 7 percent, the risk free rate is 2.5 percent, and the appropriate tax rate is 18 percent, what is Cunningham Corporation's WACC? Group of answer
choices 12.51 percent 11.58 percent 11.00 percent 10.69 percent 7.86 percent
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