The stock is currently selling for $15.25 per share, and its noncallable $1,000 par value, 20-year, 7.25% bonds with semiannual payments are selling for $875.00. The beta is 1.25, the yield on a 6-month Treasury bill is 3.50%, and the yield on a 20-year Treasury bond is 5.50%. The required return on the stock market is 11.50%, but the market has had an average annual return of 14.50% during the past 5 years. The firm's tax rate is 40%. Required:
a. What is the best estimate of the after-tax cost of debt (%)?
b. Based on the CAPM, what is the firm's cost of equity (%) ?
c. Calculate the weights of market value of debt and market value of equity for use in calculating the WACC based in market values?
d. Calculate ABC's WACC (%).

What is the difference between a public and a private corporation?

Which of the following statements is correct? a) due to limited liability, unlimited lives, and ease of ownership transfer, the vast majority of u.s. businesses (in terms of number of businesses) are organized as corporationsb) most businesses (by number and total dollar sales) are organized as proprietorships or corporation. however, if the business gets very large, it becomes advantageous to convert to a corporation, primarily because corporations have important tax advantages over proprietorships and partnerships.c) due to legal considerations related to ownership transfers and limited liability, which affect the ability to attract capital, most business (measured by dollar sales) is conducted by corporations in spite of large corporations' less favorable tax treatmentd) large corporations are taxed more favorably than proprietorshipse) corporate stockholders are exposed to unlimited liability

Suppose that kenji, an economist from an am talk radio program, and lucia, an economist from a school of industrial relations, are arguing over health insurance. the following dialogue shows an excerpt from their debate: lucia: a popular topic for debate among politicians as well as economists is the idea of providing government assistance for health benefits. kenji: i think it is oppressive for the government to tax people who take care of themselves in order to pay for health insurance for those who are obese. lucia: i disagree. i think government funding of health insurance is useful to ensure basic fairness. the disagreement between these economists is most likely due to . despite their differences, with which proposition are two economists chosen at random most likely to agree? lawyers make up an excessive percentage of elected officials. minimum wage laws do more to harm low-skilled workers than them. tariffs and import quotas generally reduce economic welfare.