Bouncing baby foods bbf balance shed shows a total of 20


Bouncing Baby Foods' (BBF) balance shed shows a total of $20 million long-term debt with a coupon rate of 8.00 percent. The yield to maturity on this debt is 10.00 percent, and the debt has a total current market value of $17.5 million. The balance sheet also shows that that the company has 10 million shares of stock, and total of common equity (common stock plus retained earnings; is $30 million I he current stock price is $3.50 per share, and stockholders' required rate of return, r_s, is 12.47 percent. The company has no preferred stock outstanding. The company recently decided that its target capital structure should have 50% debt, with the balance being common equity. The tax rate is 40%. Calculate WACCs based on target, book, and market value capital structures.

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Financial Management: Bouncing baby foods bbf balance shed shows a total of 20
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