Find cost of debt

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Company A has an outstanding bond issue with 5 years to maturity, a face value of $1,000 and a coupon rate of 5% that pays out semi-annually. The bond sells for $900.

Company stock sells for $4 per share with 1 million shares outstanding. The beta is 1.2.

The S &P currently yields 7% and treasury bills currently yield 2%. The face value of company's long term debt is $3 million. Find the cost of equity?

Find cost of debt? Find WACC?

Reference no: EM131478514

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