Sfe inc has 1 million shares of common stock outstanding at, Ask an Expert

Finance

SFE Inc. has 1 million shares of common stock outstanding at a book value of $40 per share. The stock trades for $50 per share. It also has $10 million in face value of debt (corporate bonds of 5 years with coupon rate 10.4%, paid semi-annually) that trades at 110% of face value. The company’s common stock has a beta of 1.2. Treasury bills yield 2% and the market return is 10%. The corporate tax rate is 35%.

What is the after-tax WACC?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92345762

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