The company has 60 million outstanding shares and is currently trading on TSX for $85 per share. Its Beta, based on the 5-year daily stock prices, is 1.23. The risk - free rate is 3.85%, and the market risk premium is 8%. The company also has a debt of 3 million bonds with 15 years to maturity. The coupon rate is 9%, paid annually, and is available for purchase at $1150. The tax rate is 25%. Calculate WACC
The company has 60 million outstanding shares and is currently trading on TSX for $85 per share. Its Beta, based on the 5-year daily stock prices, is 1.23. The risk - free rate is 3.85%, and the market risk premium is 8%. The company also has a debt of 3 million bonds with 15 years to maturity. The coupon rate is 9%, paid annually, and is available for purchase at $1150. The tax rate is 25%. Calculate WACC
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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The company has 60 million outstanding shares and is currently trading on TSX for $85 per share. Its Beta, based on the 5-year daily stock prices, is 1.23. The risk - free rate is 3.85%, and the market risk premium is 8%. The company also has a debt of 3 million bonds with 15 years to maturity. The coupon rate is 9%, paid annually, and is available for purchase at $1150. The tax rate is 25%. Calculate WACC
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