Solved: The stockholders required rate of return rs is 1200 the tax, Basic Computer Science

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The stockholders required rate of return rs is 1200 the tax

Please provide a step by step solution to this problem: WACC Calculations

The formula we use is WACC = wd*rd(1-T)+wp*rp+ws*rs

Bolster Foods' (BF) balance sheet shows a total of $25 million long-term debt with a coupon rate of 8.50%. The yield to maturity on this debt is 8.00. The balance sheet also shows that the company has 10 million shares of stock, and the stock has a book value per share of $5.00. The stockholders' required rate of return, rs, is 12.00%. The tax rate is 40%. Calculate WACC based on book values.

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Basic Computer Science: The stockholders required rate of return rs is 1200 the tax

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