A firm has determined its optimal capital structure which is
composed of the following sources and target market value
proportions. 75% common stock equity and 25% debt.
Debt: The firm can sell a 12-year, $1,000 par value, 7
percent bond for $1,000.
Common Stock: The beta on the company's common stock is 0.8. The
expected return of the market is 10% and the current yield on the
10 year Treasury bond is 6%;
Firm's marginal tax rate is 40 percent.
What is the WACC for the company?
A firm has determined its optimal capital structure which is composed of the following sources and target market value p
-
answerhappygod
- Site Admin
- Posts: 899603
- Joined: Mon Aug 02, 2021 8:13 am