Company X has $25 million in outstanding debt and 10 million shares outstanding. The book value per share is $10, while the market value is $ 25. The company is currently rated A, its bonds have a yield to maturity of 10%, and the current beta of the stock is 1.06. The sixmonth T.Bill rate is 8% now, market premium is 5.5% and the company's tax is 40%. What is the company's current weighted average cost of capital?

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05-07-2024
Business

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Company X has $25 million in outstanding debt and 10 million shares outstanding. The book value per share is $10, while the market value is $ 25. The company is currently rated A, its bonds have a yield to maturity of 10%, and the current beta of the stock is 1.06. The sixmonth T.Bill rate is 8% now, market premium is 5.5% and the company's tax is 40%. What is the company's current weighted average cost of capital?

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