Finance Question

Anonymous
timer Asked: Oct 23rd, 2018
account_balance_wallet $40

Question Description

Your firm has 10 million shares outstanding, with $10 per share. The firm's debt represents 30% of the capital structure, and the average yield to maturity is 10%. We assume a corporate tax rate of 30%. The market rate of return is 10%. The risk free rate is 2%.The standard deviation are 8% for the market, and 1% for your firm.

a) What is the market value of the company's debt?

b) What is the cost of debt in percentage?

c) What is the firm's weighted average cost of capital?


Tutor Answer

Tutor_Booth
School: UT Austin

Hey! There you go. All the best

Running head: FINANCE QUESTION

1

Finance question
Name
...

flag Report DMCA
Review

Anonymous
Goes above and beyond expectations !

Similar Questions
Hot Questions
Related Tags
Study Guides

Brown University





1271 Tutors

California Institute of Technology




2131 Tutors

Carnegie Mellon University




982 Tutors

Columbia University





1256 Tutors

Dartmouth University





2113 Tutors

Emory University





2279 Tutors

Harvard University





599 Tutors

Massachusetts Institute of Technology



2319 Tutors

New York University





1645 Tutors

Notre Dam University





1911 Tutors

Oklahoma University





2122 Tutors

Pennsylvania State University





932 Tutors

Princeton University





1211 Tutors

Stanford University





983 Tutors

University of California





1282 Tutors

Oxford University





123 Tutors

Yale University





2325 Tutors