What is your firm weighted average cost of capital

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Reference no: EM131616060

Assume that your firm's marginal tax rate is 35% and that your firm has the following capital structure:

Bonds

coupon rate = 6%: yield-to-maturity = 5.5% : Market value of bonds = $35 million: Book value of bonds = $30 million

Common stock

Book value of common shares = $25 million : Market value of common shares = $50 million: Required rate of return (r) = 9.5%

What is your firm’s Weighted Average Cost of Capital (report as a raw number, i.e. if it is 10.43%, plug in 10.43)?

Reference no: EM131616060

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