Reference no: EM131318604
Raymond Mining Corporation has 2 million shares of common stock outstanding and 25,000 semiannual bonds outstanding, each with an annual coupon rate of 10% and a par value $1,000. The common stock currently sells for $35 per share and has a beta of 1.25. The bonds have exactly 10 years to maturity and the current annual yield to maturity (YTM) is 9%. The market risk premium for stocks is 7.6%, T-bills are yielding 4%, and company's tax rate is 35%.
Market Value of debt = $ __(Round intermediate step to 2 decimal places, so final answer should automatically be rounded to closest dollar- DO NOT use commas!)
Market Value Debt/Equity Ratio = __(Express answer as a decimal, rounded to 2 decimal places- ie 0.75)
Cost of debt = __ % (Express your answer in percentage terms, rounded to 2 decimal places- ie 19.65)
Cost of equity= __ % (Express your answer in percentage terms, rounded to 2 decimal places- ie 24.00)
WACC =__ % (Don't round intermediate steps. Express your answer in percentage terms, rounded to 2 decimal places- ie 14.51)
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