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A compute the wacc using market value weights and costs b

You are given the following information for A.A.T. Bass & Co., Inc:

Shares outstanding = 395 million

Price of common stock = $25.65

Book value of equity = $5.15 billion

Book value of debt (bonds) = $1.68 billion

Market price of bonds = 95.85 percent of par, due March 2028

Coupon rate on outstanding bonds = 6.20%

Yield on 10-year Treasury notes (Rf) = 2.7%

Expected return on Market Portfolio (Rm) = 8.5%

Equity beta = 1.22; Tax rate = 24%

a) Compute the WACC using market value weights and costs

b) Compute the book value Debt/Equity ratio

c) Compute the Price-to-book value ratio

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