Question 1 CK Investment Bank has the following capital structure What is the WACC for the companY’
Debt Bond 1 100,000 bonds with a coupon rate of 8! (paid semi-annually), a price quote of 120 0 and have 30 years to maturity The semi-annual 1-IM is 3 24° Bond 2 100,000 zero coupon bonds (semi-annual compounding) with a price quote of 30 0 and 20 years until maturity Preferred stock 200,000 shares of 5 percent preferred stock with a current price of $70, and a par value of S1001 Common stock 5.000,000 shares of conunon stock, with a pnce of $60, and a beta of 1 Market The corporate tax rate is 40 percent, the market risk premium is and the risk-free rate is 3%
