What is the firms market value of capital

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Reference no: EM133496952

Question: Enbridge Energy Corporation has 8.8 million shares of common stock outstanding, and 149,000 7.50% semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $36 per share and has a beta of 1.40, and the bonds have 10 years to maturity and sell for 117% of par.

The market risk premium is 7.6%, T-bills are yielding 5%, and Enbridge Energy Corporation's tax is 38%. (Please show your workout in handwritten format and submit by attachment).

a) What is the firms market value of Capital?

b) Calculate WACC (Weighted Average Cost of Capital)?

Reference no: EM133496952

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