If Wild Widgets were an all equity company it would have a beta of 1.1. The company has a target debt-equity ratio of 0.40. The expected return on the market portfolio is 12% and Treasury bills currently yield 5%. The company has one bond issue outstanding that matures in 20 years and has an 8% coupon rate. The bond currently sells for $975. The tax rate is 34%. What is the company's cost of debt? What is the company's cost of equty? What is the company's WACC?
This question was answered on: May 23, 2022
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