The total value of ZBS’s equity is K10 million and the book value per share is K20. The stock sells

The total value of ZBS’s equity is K10 million and the book value per share is K20. The stock sells for a price of K30 per share and the cost of equity is 15 percent. The company’s bonds have a face value of K5 million and sell at a price of 110 percent of face value. The yield to maturity on the bonds is 9 percent and the company’s tax rate is 40 percent. Find the weighted average cost of capital for ZBS.


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