ABC Inc. has the balance sheet as shown below. Recently the yield on bonds similar to the ones that company has had increased to 4.25%, so that the market value of the bonds is now about $715 million The rate on company' short-term notes is equal the market's rate on these notes, which is 3%. What are the company's total invested capital and capital structure weights? What is the company's cost of equity according to CAPM, if the U.S. T-bond yield is 2.00 %, the long-term market risk premium is 4.5% and the company's levered beta is 1.2? What is the company's WACC?
DATE
Question answered on Jul 22, 2018
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