You are contemplating about whether to use book value or market value weights in WACC calculation. Your firm's balance sheet shows a total of non-callable $40 million long-term debt with a coupon rate of 6% and a yield to maturity of 5%. This debt currently has a market value of $50 million. The company has 10 million shares of common stock, and the stock has a book value per share of $6.00. The curren stock price is $20.00 per share; stockholders' required return, rs, is 10%; and the firm's tax rate is 30%. You are contemplating about whether to use book value or market value weights in WACC calculation. Your firm's balance sheet shows a total of non-callable $40 million long-term debt with a coupon rate of 6% and a yield to maturity of 5%. This debt currently has a market value of $50 million. The company has 10 million shares of common stock, and the stock has a book value per share of $6.00. The curren stock price is $20.00 per share; stockholders' required return, rs, is 10%; and the firm's tax rate is 30% 
Other questions asked by students
Civil Engineering
Biology
Physics
Physics
Algebra