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Company destroying or creating value

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Reference no: EM133306392

Given the following information, what is the value of XYZ Corporation and its WACC?

A. Common Stock: 14. 2 million shares outstanding, price = $35 per share

Bond Issue 2: $175 million total face value, price = $850 per bond

-Beta = 1.15Required return = 12%-Market risk premium = 9%-Risk-free rate = 5%-Coupon rate = 9%, semiannual coupons-15 years to maturity

Tax rate = 40%

B. Based on your WACC from above, If a Company eventually recorded a 12 percent profit margin is the Company destroying or creating value? Discuss.

Reference no: EM133306392

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