Multiple Question Quiz
Question # 00105638
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Updated on: 09/20/2015 12:57 PM Due on: 09/20/2015
3) Given the following information for UARE Inc. Find the WACC.
| Tax rate | 35 percent |
| Debt: | |
| Bonds outstanding: | 6000 |
| Coupon on bonds: | 4 percent |
| Par value of bonds: | $1000 |
| Bonds selling at what percent of par: | 105 |
| Bonds make coupon payments: | semi-annually |
| Years to maturity of bonds | 25 |
| Common Stock: | |
| Shares Outstanding: | 185,000 |
| Current price/share: | $58.00 |
| Beta: | 1.10 |
| Market Information: | |
| Risk premium: | 7 percent |
| Risk-free rate | 5 percent |
| a) |
| b) |
| c) |
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Rating:
/5
Solution: Given the following information for UARE Inc. Find the WACC.