You are given the following information for A.A.T. Bass & Co., Inc:
Shares outstanding = 395 million
Price of common stock = $25.65
Book value of equity = $5.15 billion
Book value of debt (bonds) = $1.68 billion
Market price of bonds = 95.85 percent of par, due March 2028
Coupon rate on outstanding bonds = 6.20%
Yield on 10-year Treasury notes (Rf) = 2.7%
Expected return on Market Portfolio (Rm) = 8.5%
Equity beta = 1.22; Tax rate = 24%
a) Compute the WACC using market value weights and costs
b) Compute the book value Debt/Equity ratio
c) Compute the Price-to-book value ratio