(Solution Download) ABC Inc. has the balance sheet as shown below. Recently the yield on bonds similar to the ones that.


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?

 







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