Determine weighted average cost of capital for jjj company

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Question 1: JJJ Company has 1 million shares of common stock currently trading at $30 per share. Current risk free rate is 4%, market risk premium is 8% and the company has a beta of 1.2. It also has 50,000 bonds of $1,000 par whose yield to maturity is 10%, maturing in 20 years currently trading at $950. The tax rate is 30%. Determine the weighted average cost of capital for JJJ Company.

Reference no: EM132639399

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