SSX Ltd has 5 million shares of common stock outstanding, 2 million shares of preferred stock outstanding, and 100,000 bonds (face value $1,000). The common shares are selling for $25 per share, the preferred shares are selling for $10 per share, and the bonds are selling for 101% of par. The cost of equity is 20%. The cost of preference shares is 15% and the cost of debt is 10%, with the tax rate being 20%. What is SSX's WACC? O 15.9% 14.7% 12.5% 15.5%
SSX Ltd has 5 million shares of common stock outstanding, 2 million shares of preferred stock outstanding, and 100,000 bonds (face value $1,000). The common shares are selling for $25 per share, the preferred shares are selling for $10 per share, and the bonds are selling for 101% of par. The cost of equity is 20%. The cost of preference shares is 15% and the cost of debt is 10%, with the tax rate being 20%. What is SSX's WACC? O 15.9% 14.7% 12.5% 15.5%
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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![SSX Ltd has 5 million shares of common stock outstanding, 2
million shares of preferred stock outstanding, and 100,000 bonds
(face value $1,000). The common shares are selling for $25 per
share, the preferred shares are selling for $10 per share, and the
bonds are selling for 101% of par. The cost of equity is 20%. The
cost of preference shares is 15% and the cost of debt is 10%, with
the tax rate being 20%. What is SSX's WACC?
O 15.9%
14.7%
12.5%
15.5%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0da67444-19cc-4c8c-be3d-90d087e626a4%2F066510a7-2580-4515-82ae-6a23bb0347f0%2Flb42ac7_processed.png&w=3840&q=75)
Transcribed Image Text:SSX Ltd has 5 million shares of common stock outstanding, 2
million shares of preferred stock outstanding, and 100,000 bonds
(face value $1,000). The common shares are selling for $25 per
share, the preferred shares are selling for $10 per share, and the
bonds are selling for 101% of par. The cost of equity is 20%. The
cost of preference shares is 15% and the cost of debt is 10%, with
the tax rate being 20%. What is SSX's WACC?
O 15.9%
14.7%
12.5%
15.5%
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