Candyland Inc. has 400,000 shares outstanding that sell for $33 a share. It also has a current bond issuance outstanding with a market value of $5 million. The firm’s book value of debt is $7 million. The firm’s equity cost of capital is 5.0% and the YTM of its debt is 3.0%. What is Candyland’s Pre-tax WACC? A. 4.27% B. 4.45% C. 4.11% D. 4.31%
Candyland Inc. has 400,000 shares outstanding that sell for $33 a share. It also has a current bond issuance outstanding with a market value of $5 million. The firm’s book value of debt is $7 million. The firm’s equity cost of capital is 5.0% and the YTM of its debt is 3.0%. What is Candyland’s Pre-tax WACC? A. 4.27% B. 4.45% C. 4.11% D. 4.31%
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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Candyland Inc. has 400,000 shares outstanding that sell for $33 a share. It also has a current bond issuance outstanding with a market value of $5 million. The firm’s book value of debt is $7 million. The firm’s equity cost of capital is 5.0% and the YTM of its debt is 3.0%. What is Candyland’s Pre-tax WACC?
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