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  3. 5.?calculate the waac with the following informati

5.?Calculate the WAAC with the following information: ??Equity Information????Debt Information ??10,000 shares????$200,000 in outstanding debt ?????????(face value) ??$60 per...

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Finance

5.?Calculate the WAAC with the following information:
??Equity Information????Debt Information
??10,000 shares????$200,000 in outstanding debt ?????????(facevalue)
??$60 per share
??Beta = 1.2?????Current quote = 100
??Market risk premium = 12%??Annual coupon rate = 10%
??Risk-free rate = 5%????Tax rate = 20%

Answer & Explanation Solved by verified expert
3.6 Ratings (490 Votes)
First we will calculate the cost of equity by CAPM model by the following formula Cost of equity Risk free rate Beta Market risk premium Given Risk    See Answer
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