I am in need of help with these two.
BOOK VALUE MARKET VALUE BEFORE-TAX COST
Bonds $1,000 $1,000 8%
Preferred stock $400 $300 9%
Common stock $600 $1,700 14%
(Leveraged returns) You have a chance to make a $70,000 one-year investment. The investment is expected to earn 15%, and there are no taxes. If you borrow $45,000 at 9% and put up the other $25,000 with your own money, what will be your expected return on the $25,000?© BrainMass Inc. brainmass.com December 20, 2018, 4:01 am ad1c9bdddf
The solution explains how to calculate the WACC and how to determine leveraged returns.