Explore BrainMass

Explore BrainMass

    Finding WACC Common Stock

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    A company's given tax rate is 35%. Debt is the following: 5,000, 9.4% coupon bonds outstanding, $1,000 par, with semi-annual payments,

    Common Stock is : 165,000 shares outstanding, selling for $62 per share; beta 1.15.

    Market = 6.5 % market risk premium and 5.5% risk free rate.

    What is the company's WACC?

    © BrainMass Inc. brainmass.com December 16, 2022, 6:52 am ad1c9bdddf

    Solution Preview

    WACC = Proportion of debt X after tax cost of debt + Proportion of equity X cost of equity
    The proportions are based on the market values.
    Assuming that the market value of bonds is the same as the ...

    Solution Summary

    The expert examines finding WACC in common stocks.