What is jhm corporation weighted average cost of capital

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Reference no: EM132941511

Problem 1: Given the following information, what is JHM Corporation's weighted average cost of capital (WACC)?

Common Stock: 2 million shares outstanding at $30 per share; stock beta = 0.5

Bonds:

80,000 bonds outstanding

$1,000 face value for each bond

7% semi-annual coupon

10 years to maturity

The bonds are selling at 108.25% of face value

Market risk premium = 7%

Risk-free rate = 5%

Tax rate = 34%

Reference no: EM132941511

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