Company x has capital structure compromised of 35 billion


Company X has Capital Structure compromised of 3.5 Billion in debt-Comprimosed entirely of bonds with a 5% coupon rate and 4.5%YTM and a $4Billion in equity. US Gov’s T-Bonds are trading at a rate of 1.85% and the historic Market return is 9.6%. Company X’s beta is 0.74. the tax rate is 35%

A. What is Company X’s Cost of Equity?

B. What is Company X’s WACC?

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Financial Management: Company x has capital structure compromised of 35 billion
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