Nacho Libre S.A. has 3,000,000 common shares outstanding that trade for $20.00 per share. The company has also issued one bond with a par value of $60,000,000 that currently trades at 110 percent of par. You observe that the company's required return on stock is 10.00 percent and the (after-tax) yield to maturity on its debt is 2.00 percent. What is the weighted average cost of capital? Write your answer as a percent rounded to two decimals, but don't include % sign.
Nacho Libre S.A. has 3,000,000 common shares outstanding that trade for $20.00 per share. The company has also issued one bond with a par value of $60,000,000 that currently trades at 110 percent of par. You observe that the company's required return on stock is 10.00 percent and the (after-tax) yield to maturity on its debt is 2.00 percent. What is the weighted average cost of capital? Write your answer as a percent rounded to two decimals, but don't include % sign.
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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