Calculation of individual costs and WACC BlackRock, Inc. (BLK) has a capital structure that consists of common stock equity and debt. The market capitalization of its equity is $76.644 billion and its debt has a market value of $6.797 billion. a. Calculate the market value weights for BLK's capital structure. b. Calculate BLK's cost of equity using a beta of 1.26, a risk-free rate of 0.78%, and a market risk premium of 6.70%. c. Calculate BLK's cost of debt using a bond price of $1,067.77, semi-annual coupon payment of $28.75, and 5 years to maturity. d. Calculate BLK's current WACC using a 21% corporate tax rate. a. The market value weight of long-term debt in BLK's capital structure is %. (Round to two decimal places.)
Calculation of individual costs and WACC BlackRock, Inc. (BLK) has a capital structure that consists of common stock equity and debt. The market capitalization of its equity is $76.644 billion and its debt has a market value of $6.797 billion. a. Calculate the market value weights for BLK's capital structure. b. Calculate BLK's cost of equity using a beta of 1.26, a risk-free rate of 0.78%, and a market risk premium of 6.70%. c. Calculate BLK's cost of debt using a bond price of $1,067.77, semi-annual coupon payment of $28.75, and 5 years to maturity. d. Calculate BLK's current WACC using a 21% corporate tax rate. a. The market value weight of long-term debt in BLK's capital structure is %. (Round to two decimal places.)
Chapter14: Security Structures And Determining Enterprise Values
Section: Chapter Questions
Problem 1hM
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![Calculation of individual costs and WACC BlackRock, Inc. (BLK) has a capital structure that consists of common stock equity and debt. The market capitalization of its equity is $76.644 billion
and its debt has a market value of $6.797 billion.
a. Calculate the market value weights for BLK's capital structure.
b. Calculate BLK's cost of equity using a beta of 1.26, a risk-free rate of 0.78%, and a market risk premium of 6.70%.
c. Calculate BLK's cost of debt using a bond price of $1,067.77, semi-annual coupon payment of $28.75, and 5 years to maturity.
d. Calculate BLK's current WACC using a 21% corporate tax rate.
a. The market value weight of long-term debt in BLK's capital structure is %. (Round to two decimal places.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7f11bf28-e8e9-4ceb-a016-5da82d56c5e9%2F4b753ebd-e620-4912-a782-b26c5e380c5d%2Farfz97n_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Calculation of individual costs and WACC BlackRock, Inc. (BLK) has a capital structure that consists of common stock equity and debt. The market capitalization of its equity is $76.644 billion
and its debt has a market value of $6.797 billion.
a. Calculate the market value weights for BLK's capital structure.
b. Calculate BLK's cost of equity using a beta of 1.26, a risk-free rate of 0.78%, and a market risk premium of 6.70%.
c. Calculate BLK's cost of debt using a bond price of $1,067.77, semi-annual coupon payment of $28.75, and 5 years to maturity.
d. Calculate BLK's current WACC using a 21% corporate tax rate.
a. The market value weight of long-term debt in BLK's capital structure is %. (Round to two decimal places.)
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