Below is the information on R firm and its tax rate is at 25% . Hasil...

Below is the information on R firm and its tax rate is at 25% .

Hasil hingga Matang (Yield to Maturity)	9%
(Number Common Stocks)	20,000
(Price Per share)	$40
(Long-term debt)	$400,000
(Book value per share)	$30
(Expected Rate of Return on Stock)	16%

i.) Find the company cost of capital

ii.) Subsidiary company to R firm, i.e. FL firm book value is at RM25 per share and its trading price currently is $50. The company’s balance sheet is showing $30 billion in long-term debt and it’s the same as its current value. It has 600 million shares currently outstanding. What is its market debt to total value ratio?(Assuming there is not tax rate)

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ekkarill92 answered 1 year ago

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