How do you calculate the WACC for this company?
Earline asks:
Company issues 400,000 shares in stock using an IPO and issues equity at $6 a share. This nets the company $5.
Company issues 400,000 shares in stock using an IPO and issues equity at $6 a share. This nets the company $5.
Industry Beta is 1.5
Debt ratio is .59
Equity ratio is .41
risk free rate is 9%
I have the B/S and I/S if that proves useful, but that’s all I have to try and calculate this. Any ideas?
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I can’t compute this without giving me the cost of debt and cost of equity
the WACC would be 0.59 x cost of debt + 0.41 x cost of equity
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