If Wild Widgets, Inc., were an all-equity company, it would have a beta of .90. The company has a target debt-equity ratio of .60. The expected return on the market portfolio is 11 percent and Treasury bills currently yield 3.3 percent. The company has one bond issue outstanding that matures in 26 years, a par value of $2,000, and a coupon rate of 6 percent. The bond currently sells for $2,130. The corporate tax rate is 24 percent.    a. What is the company’s cost of debt? What is the company’s cost of equity? What is the company’s weighted average cost of capital?

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A: Here, To Find: Part A. Cost of debt =? Part B. Cost of equity =? Part C. WACC =?

Q: What is their yield to call (YTC)?

A:

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A:

Q: You are analyzing the cost of debt for a firm. You know that the firm’s 14-year maturity, 7.4…

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Q: Malko Enterprises’ bonds currently sell for $1,050. They have a 6-year maturity, an annual coupon of…

A:

Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.