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QUESTION
The beta of the firm's stock is 1. The firm uses a risk-free rate of 4% and the market risk premium of 7%.
The beta of the firm's stock is 1.75. The firm uses a risk-free rate of 4% and the market risk premium of 7%. Threes cOMPANY
has 15,000 9 percent semi-annual coupon bonds outstanding, $1,000 par value per bond, 15 years to maturity, selling for 108 percent of par. Threes Electronic can issue bonds for $5 ~ $6 million in the similar terms.Company tax rate is 35%. What is the market value? WACC?
