Business, 24.06.2020 02:01 tlecuyer

A firm has issued 40,000 shares of stock whose current price is $81 per share. Shareholders expect an annual return of 15%. The firm also has a two-year loan of $1,800,000 at 6.4% annual interest. It has also issued 8,500 bonds with a face value of $1,000 each, with 15 years left to maturity, semi-annual compounding, and a coupon interest rate of 5%. The bonds are currently worth (have a current market price of) $1,100 each on the market.(a) Using market values for its debt and equity, calculate the firm's weighted-average cost of capital (WACC) before taxes. Round to tenths place (e. g., 12.8%) (b) Assume a tax rate of 38% applies. Calculated the WACC after accounting for the impact taxes have with same rounding)

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A firm has issued 40,000 shares of stock whose current price is $81 per share. Shareholders expect a...