Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. given the following information about your firm’

Given the following information about your firm’s capital structure, calculate your firm’s WACC (assume the corporate...

50.1K

Verified Solution

Question

Finance

Given the following information about your firm’s capitalstructure, calculate your firm’s WACC (assume the corporate taxrate is 35%). Debt Number of bonds outstanding = 12,000 price perbond = $1,165 par value per bond = $1,000 coupon rate = 6% (paidannually) Years to maturity = 10 Common Stock Number of sharesoutstanding = 1,000,000 Price per share = $25 Book value per share= $15 Beta = 1.4 Risk free rate = 4.5% Market risk premium = 5%

Answer & Explanation Solved by verified expert
3.6 Ratings (432 Votes)
Market value of debt 116512000 13980000Market value of equity 251000000 25000000Total firm value 13980000 25000000 38980000Weight of debt in the capital structure 1398000038980000 03586100 3586Weight of equity in the    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

Given the following information about your firm’s capitalstructure, calculate your firm’s WACC (assume the corporate taxrate is 35%). Debt Number of bonds outstanding = 12,000 price perbond = $1,165 par value per bond = $1,000 coupon rate = 6% (paidannually) Years to maturity = 10 Common Stock Number of sharesoutstanding = 1,000,000 Price per share = $25 Book value per share= $15 Beta = 1.4 Risk free rate = 4.5% Market risk premium = 5%

Other questions asked by students

Q

"Interpreting Tax Research and Tax Representation Guidelines" Compare the American Institute of CPAs’ (AICPA) Statements on Tax Standards...

Finance
Q

CHEM 4722/5722 Homework Set #3 (due beginning of class Thu Apr 2) Homework is to be turned...

Biology
Q

This year, three scientists won the Nobel Prize in Physics. Give a brief summary of their...

Physics
Q

The voltage V in an alternating circuit obeys the equation V 120 sin 120nt t...

Physics
Q

A balloon has 8 gram of air The air escapes out from a small hole...

Physics
Q

a Replace the polar equation 8rsine with the equivalent Cartesian equation t

Calculus
Q

Hello, please help with my accounting homework! Scenario: Parker Pottery produces a line of vases...

Accounting
Q

HELP!! Product Costs using Activity Rates Hercules Inc. manufactures elliptical exercise machines and...

Accounting
Q

Determine the market price of a $750,000, ten-year, 10% (pays interest semiannually) bond issue sold...

Accounting
Q

Use the following information to complete Paige Turner's 2023 federal income tax return. If information...

Accounting
Q

can anyone solve it in Excel, correctly, please? That's what the question is...no maturity...

Finance
Q

Capital budgeting IS Select one: a. the decision making process with respect to investment in...

Finance