Acompany’s balance sheets show a total of $30 million long-term debt with a coupon rate of 9 percent. the yield to maturity on this debt is 11.11 percent, and the debt has a total current market value of $25 million. the balance sheets also show that that the company has 10 million shares of stock; the total of common stock and retained earnings is $30 million. the current stock price is $7.5 per share. the current return required by stockholders, rs, is 12 percent. the company has a target capital structure of 40 percent debt and 60 percent equity. the tax rate is 40%. what weighted average cost of capital should you use to evaluate potential projects
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Acompany’s balance sheets show a total of $30 million long-term debt with a coupon rate of 9 percent...
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