5.?Calculate the WAAC with the following information: ??Equity Information????Debt Information ??10,000 shares????$200,000 in outstanding debt ?????????(face value) ??$60 per...

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Finance

5.?Calculate the WAAC with the following information:
??Equity Information????Debt Information
??10,000 shares????$200,000 in outstanding debt ?????????(facevalue)
??$60 per share
??Beta = 1.2?????Current quote = 100
??Market risk premium = 12%??Annual coupon rate = 10%
??Risk-free rate = 5%????Tax rate = 20%

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First we will calculate the cost of equity by CAPM model by the following formula Cost of equity Risk free rate Beta Market risk premium Given Risk See Answer

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5.?Calculate the WAAC with the following information: ??Equity Information????Debt Information ??10,000 shares????$200,000 in outstanding debt ?????????(face value) ??$60 per...

90.2K

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Finance

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