Assume JUP has debt with a book value of $20 million, trading at 120% of par value. The bonds have a yield to maturity of 7%. The firm's book value of equity is $16 million, and it has 2 million shares trading at $19 per share
The firm's cost of equity is 12%. What is JUP's WACC if the firm's marginal tax rate is 35%?
A) 10.03%
B) 9.12%
C) 9.57%
D) 7.29%
Answer: B
Business
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What will be an ideal response?
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