Compute appen ltd weighted average cost of capital

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Appen Ltd. has an outstanding bond issue that the company sold 5 years ago for $50 million. The market value of these bonds today is $38 million. The effective annual yield on these bonds is 7.75%. The company has also 17.5 million ordinary shares outstanding with a current price of $16 per share. The Beta of the ordinary share is 1.9, the market risk premium is 8% and the risk-free rate is 1.5%. Appen Ltd. has a 30% corporate tax rate.

Problem 1: Compute Appen Ltd's weighted average cost of capital (WACC).

Reference no: EM132913424

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