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This question was created from 6640FinalExamFall2016 (2) https://www.coursehero.com/file/21811339/6640FinalExamFall2016-2/

Zelus Sport Shoe Company has three debt issues outstanding.
(1.5% Notes December 31. 2021 {\$200 million face value} Market price \$9?2.20 10% Bonds, maturing December 3] , 2026 {\$100 million Face value} Market price \$992.05
15% Bonds, maturing December 31. 2031 {\$200 million face 1value} Market price \$1,018.05 All bonds have a \$1,000 face value and pay interest semi-annually. Use a 5.0% risk-free rate and a 10% market risk premium to compute Zelus’s cost of equity. The
table shows the weekly closing prices for Zelus and the SELF 500 Index. Last week Zelus’s stock
closed at \$93.04 per share. There are 115 million shares of common stock outstanding. The company a]so has 3 million shares of preferred stock outstanding. The preferred stock pays an
annual \$5.00 dividend and current sells for \$50 per share. The tax rate is 30%. Assume you are doing the WAGE calculation on January 1, 2010, and that the semi-annual interest
payments of the notes and bonds were paid on December 31, 2015. Show your beta and the tests
and weights of all of the WACC components. A table is a good way to do this. A template is belu Beta [3 decimal places] =

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