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Margo is a major producer of lawn care products. Its stock currently sales for $80 per share;>> Get This Solution

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Margo is a major producer of lawn care products. Its stock currently sales for $80 per share, there are 10.5 million shares outstanding. Margo also has 400,000 bonds outstanding ($1000 face value per bond). These 10-year bonds pay annually have a current yield of 10% and trade at 90% of the face value. The risk free rate is 8%. The market risk premium is 9%, and Margo has beta equal to 2. The corporate tax rate is 34%.;A. Margo is considering expansion of its facilities. Use the SML to determine the cost of equity.;B. Compute the WACC for Margo.;Additional Requirements;Level of Detail: Show all work;Other Requirements: please provide on excel spreadsheet

 

Paper#29376 | Written in 18-Jul-2015

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