Wbc corporation has a stock market value of 1 billion it


WBC corporation has a stock market value of $1 billion. It has long term debt of $500 million outstanding at the borrowing cost of %7. It's stock has a beta of 1.2 and the market return is 10% with risk free rate at %4. Tax rate is 35%.

a) What's the company cost of equity under CAPM?

B) What's company after tax cost of debt?

C) What's the company's WACC?

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Financial Management: Wbc corporation has a stock market value of 1 billion it
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