Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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The following data refers to Company Z:
- Beta = 1.7
- Required return on debt (yield to maturity on a long term bond) = 3.1%
- Tax rate = 21%
- 30-year government bond = 2.3%
- Market risk premium can be assumed to be 5%
Estimate the cost of capital (WACC) for Company Z.
Transcribed Image Text:Current Capitalization (Millions of USD)
Currency
Million USD
Shares Price
$
10.7
Shares Outstanding
58.2
Market Capitalization
622.7
|- Cash & Short Term Investments
10.2
+ Total Debt
422.0
+ Pref. Equity
+ Total Minority Interest
=Total Enterprise Value (TEV)
1,034.5
Book Value of Common Equity
+ Pref. Equity
237.0
+ Total Minority Interest
+ Total Debt
422.0
Total book capital
659.0
%24
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