What is j corp wacc

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Reference no: EM132492535

Point 1: Now that Anna has determined an appropriate rate of return for J Corp.'s stock, she must calculate the firm's Weighted Average Cost of Capital (WACC). There are currently 55.6 Million J Corp. common shares outstanding. Each share is currently priced at $17.85 . As well, the firm has 10,000 bonds outstanding and each bond has a face value of $10,000, a yield to maturity of 3.88% and a quoted price of $10,288.40. J Corp.'s tax rate is 30%. J Corp. has no preferred shares outstanding.

Question 1: a) What is J Corp.'s WACC?

the risk-free rate of return is 2.6%

the market risk-premium is 5.4%

Beta of J Corp.'s stock = 2.00

Expected rate of return on J Corp. stock for the coming year = 13.40%

Reference no: EM132492535

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