The noncallable bonds mature in 20 years they have a 8, Ask an Expert

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The noncallable bonds mature in 20 years, they have a 8% annual coupon rate and a par value of $1,000 and a market price of $1,050.00.

The tax rate is 40% and the risk free rate is 4.50%, the market risk premium is 5.50%, and the stock's beta is 1.20.

The target capital structure consists of 35% debt and balance is common equity. The company uses the CAPM to estimate the cost if common stock, and will not issue new shares. What is the WACC?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91600896

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