Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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- What is the WACC for a company with the following information: Equity Information: 50 million shares, $80 per share, Beta = 1.15, Market risk premium =9%, Risk-free rate = 5%. Debt Information: 1 million outstanding bonds with a face value of $1,000 each. Current Price = $1,100, Coupon rate = 9%, semiannual coupons, 15 years to maturity Tax rate = 20%arrow_forwardGiven the following information for Huntington Electric Co., *Debt: 6,000 of 8 percent coupon bonds outstanding, $1,000 par value, 10 years to maturity, selling for 108 percent of par; the bonds make annual payments. *Preferred stock: 8000 shares of 7.2% preferred stock dividend rate, selling at $90 per share. *Common stock: 500,000 shares outstanding, selling for $70 per share; the beta is 1.12. *Market data: 10 percent market rate of return and 5 percent risk-free rate, and the corporate tax rate of 30%. What is the after tax, WACC of this company? What is the after-tax, WACC of this company? Group of answer choices .9.6639% 8% 9.9802% 10%arrow_forwardCrow Academy leadership wants to know its WACC given its current capital structure. The capital structure data is as follows. Equity: 2,843,200 shares outstanding, price $18.59, stock beta 0.96. Preferred stock: 675,000 shares outstanding, price $21.74, fixed dividend $0.75. Debt: 242,000 zero annual coupon bonds issued, price is 38% of par, 15 years to maturity. If the current market return is 14.28%, the risk-free rate is 3.18%, and the tax rate is 21%, what is the company's weighted average cost of capital (WACC)?arrow_forward
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