BC Mining Coloration has 9.3 million shares of common stock outstanding and 127,000 semi-annual bonds outstanding with a face value of $1.000 and a 6 5% coupon rate. The common stock currently sells for $342 per share and has a beta of 1.18, and the bonds have 13 years to maturity and sell for 108% of face value. The market risk premium is 6.9%, T-bills (risk-free) yield 5%, and the company's tax rate is 0% ) What is the fir's market value capital structure? b) Estimate the firm's cost of equity, and after tax cost of debt. (c) Estimate the company's total cost of capital.
BC Mining Coloration has 9.3 million shares of common stock outstanding and 127,000 semi-annual bonds outstanding with a face value of $1.000 and a 6 5% coupon rate. The common stock currently sells for $342 per share and has a beta of 1.18, and the bonds have 13 years to maturity and sell for 108% of face value. The market risk premium is 6.9%, T-bills (risk-free) yield 5%, and the company's tax rate is 0% ) What is the fir's market value capital structure? b) Estimate the firm's cost of equity, and after tax cost of debt. (c) Estimate the company's total cost of capital.
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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BC Mining Coloration has 9.3 million shares of common stock outstanding and 127,000 semi-annual bonds outstanding with a face value of $1.000 and a 6 5% coupon rate. The common stock currently sells for $342 per share and has a beta of 1.18, and the bonds have 13 years to maturity and sell for 108% of face value. The market risk premium is 6.9%, T-bills (risk-free) yield 5%, and the company's tax rate is 0% ) What is the fir's market value capital structure? b) Estimate the firm's
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