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Electronics Galore has 950,000 shares of common stock

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solution


Question

Electronics Galore has 950,000 shares of common stock outstanding at a market price of $38 a share. The company also has 40,000 bonds outstanding that are quoted at 106 percent of face value. What weight should be given to the debt when the firm computes its weighted average cost of capital?

 

Paper#33557 | Written in 18-Jul-2015

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