A firm has 60,000 shares whose current price is$45.90.
Chapter , Problem 15-7(choose chapter or problem)
A firm has 60,000 shares whose current price is$45.90. Those stockholders expect a return of 14%.The firm has a 3-year loan of $1,900,000 at 7.3%. Ithas issued 22,000 bonds with a face value of 1000,20 years left to maturity, semiannualcompounding,a coupon interest rate of 7%, and a current price of$925.Using marketvalues for debt and equity, whatis the firms cost of capital:(c)Before taxes?(d)After taxes with a tax rate of 34%?
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