Question
22. McCann Catching, Inc. has 3.00 million shares of stock outstanding. The stock currently sells for $12.86 per share. The firms debt is publicly traded
22. McCann Catching, Inc. has 3.00 million shares of stock outstanding. The stock currently sells for $12.86 per share. The firms debt is publicly traded and was recently quoted at 91.00% of face value. It has a total face value of $12.00 million, and it is currently priced to yield 9.00%. The risk free rate is 3.00% and the market risk premium is 8.00%. Youve estimated that the firm has a beta of 1.12. The corporate tax rate is 40.00%.
The firm is considering a $47.86 million expansion of their production facility. The project has the same risk as the firm overall and will earn $12.00 million per year for 8.00 years.
What is the WACC for McCann Catching, Inc.?
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Fundamentals of Investments Valuation and Management
Authors: Bradford D. Jordan, Thomas W. Miller
5th edition
978-007728329, 9780073382357, 0077283295, 73382353, 978-0077283292
