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Site https://mobirink.com Jeremy has recently considered an initial public offering (IPO) to allow the firm to raise the funds it needs to go international. The underwriting group from Morgan Stanley believes they could easily raise sixty (60) million in the equity markets, and fifty (50) million in the bond market. Jeremy is trying to determine the cost of debt, the cost of equity (four [4] million shares at $15/share), and the firm’s weighted average cost of capital if he goes public and issues corporate bonds with a coupon rate of 8%. Last year, the firm resided in a 28% tax bracket. The risk-free rate in the U.S. is 2%, and the expected return on the market is 14%. Morgan Stanley estimates Galaxy’s beta, if traded publicly, would be approximately 1.8%. Galaxy has been growing at 15% a year since its inception.
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