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Burwood Investment Limited has:
1) 8 million shares of common stock outstanding, the price is $32and beta is 1.15. Market risk premium is 10%, T-bills are yielding5%.
2) 0.5 million shares of 6% preferred stock outstanding, the priceis $67.
3) 100,000 of 9% semi-annual bonds outstanding, 15 years tomaturity, and sell for 91% of par. The current yield to maturity onthese bonds is 10.18%p.a.
a) If the applicable tax rate is 35% p.a. what is the capitalstructure of the firm?
b) What is the firm’s WACC?

Please give the calculation process

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Elin Hessel
Elin HesselLv2
28 Sep 2019

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