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 billionand 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.)

Part 2: Explanation:a. To calculate the market value weights, divide the market capitalization of…

Answered: Calculation of individual costs and…

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter14: Security Structures And Determining Enterprise Values

Section: Chapter Questions

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