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Weighted average cost of capital

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Reference no: EM132285136

What is your firm's Weighted Average Cost of Capital?

Corporate taxes are 21%. The firm is financed with the following securities:

  • Common Equity:
  • 5,000,000 shares
  • price per share = $50
  • β=1.25, Mkt Risk Premium = 5%, Risk-free rate = 4%.
  •  Debt:
  • 200,000 bonds
  • face value per bond = $1000
  • market price per bond= $1075
  • coupon rate = 6%, 5 years to maturity (assume semi-annual payment.

Reference no: EM132285136

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