Calculate the big door unlevered beta

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Big door company has 10 million shares outstanding, which are currently trading for about $15 per share and have an equity beta of 1.2.big door has 20,000 outstanding bonds, with a 6 % coupon rate, payable semi-annually and due in 10 years. the bonds are rated Bbb. currently, the credit spread of BBB is 150 basis points over equivalent maturity govt of Canada debt. the current yield on 10 year Canada bonds is 4 % compounded semi-annually. the risk-free interest rate is 2.5 % AND THE MARKET RISK PREMIUM IS 6.5 %. tHE COMPANY HAS 35% TAX RATE.

Problem A. Calculate the Big door's WACC

Problem B. Calculate the Big door's unlevered beta.

Reference no: EM132794444

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