Problemat 2015 abi construction has a face debt value of, Ask an Expert

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At 2015 ABI Construction has a face debt value of 10M trading at 96% with a pre-tax weigthed cost of 7%. ABI common equity for the year was valued at 80M and preferred equity for 12M. The Preferred equity rate was calculated to be 9%. However, the common equity was to be calculated using CAPM approach, with a 3% risk free rate and a 6% market risk premium rate, assuming a 1.2 Beta. Consider also a tax rate of 39%,

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Question: What is this firm's WACC?

Note: Provide support for your rationale.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91164112

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