WACC. The Randall Corporation, s US based firm, has 400 million shares outstanding. These shares trade on the NYSE, and their most recent market price was USD 21.65. Analysts report that the beta of Randall/s equity relative to the world index is 1.3. The firm also has 10-years 6 percent annual coupon debt outstanding with a par value of USD 6 billion. This debt is privately placed. Analysts use other publicly traded debt as benchmarks to determine that the yield on Randall's debt is 5.9 percent. Randall's tax rate is 35 percent. Consider the following additional information. The risk-free rate is 4 percent, and the expected USD-denominated return on the world index is 10 percent.
a. What is the cost of equity? what model have you used in your calculation?
b. What is the before-and after- tax cost of debt?
c. what are market value financing weights?
d. what is the WACC(USD)?