Waccs based on book-market and target capital structures

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Granby Foods' (GF) balance sheet shows a total of $25 million long-term debt with a coupon rate of 8.50%. The yield to maturity on this debt is 8.00%. and the debt as a total current market value of $27 million. The company has 10 million shares of stock, and the stock has a book per share of The stock $20.00 per share, and stockholders' required rate of return, r s, is 12, 25%. The company recently decided that its target capital structure should have 35% debt, with the balance being common equity. The tax rate is 40%. Calculate WACCs based on book, market, an target capital structures. What is the average of these three WACCs?

Reference no: EM131528667

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