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Compute NTech weighted average cost of capital

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Reference no: EM132128150

COST OF CAPITAL Problem - WACC

Paramount Roofing Inc. went public by issuing 1 million shares of common stock at $50 per share. The shares are currently trading at $64 per share. Current risk-free rate is 5.2%, and market risk premium is 7.8%, and the company has a beta coefficient of 0.94.

During last year the company issued 40, 000 bonds of $1, 000 par paying 10% coupon annually maturing in 25 years. Moreover, the bonds are currently trading at $980 with the yield to maturity of 10%. The tax rate is 28%. Compute NTech's weighted average cost of capital.

Reference no: EM132128150

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