A firm has 2000000 shares of common stock outstanding with, Ask an Expert

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A firm has 2,000,000 shares of common stock outstanding with a market price of $2 per share. The firm also has 2,000 bonds outstanding with a market value of $1,200 per bond. The bonds have a 10% coupon rate (semi-annual coupons) and mature in 15 years. The firm’s beta is 1.2, the T-bill rate is 5%, and the market risk premium is 7%. If the tax rate is 34%, what is the WACC?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91613802

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