Assume that your firm's marginal tax rate is 35% and that your firm has the following...
Assume that your firm's marginal tax rate is 35% and that your firm has the following capital structure. Your firm does not issue preferred stocks. What is your firm's WACC?
Debt Book value of bonds $60 MM
Market value of bonds $50 MM
Coupon Rate 6.0% Pre-tax cost of debt (e.g., YTM) 7.5%
Common Equity Book value of common equity $20 MM
Market value of common equity $25 MM
Required return (e.g. from the CAPM) 12.6%
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Assume that your firm's marginal tax rate is 35% and that your
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