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December 11th, 2019
A firm has 30 million shares outstanding that are trading at $15 per share. The firm issued bonds whose market value is $150 million. The corporate
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(b) What is the firm’s WACC? Outstanding sharesCurernt price 30 million15 Market value of bondsTax rateCost of equityCost of debt 150 million40%10%5% Unleavered cost of debt = 10% Firm’s WACC =EquityDebt Firm’s WACC