Question
26. The East End Food Shop is estimating its WACC. The company has collected the following information: Its capital structure consists of 40 percent debt
26. The East End Food Shop is estimating its WACC. The company has collected the following information:
Its capital structure consists of 40 percent debt and 60 percent common equity. The company has 20-year bonds outstanding with a 11 percent annual coupon that are trading at par. The companys tax rate is 40 percent. The risk-free rate is 4.5 percent. The market risk premium is 7 percent. The stocks beta is 1.2.
What is the companys WACC? ________________%.
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Smith and Roberson Business Law
Authors: Richard A. Mann, Barry S. Roberts
15th Edition
1285141903, 1285141903, 9781285141909, 978-0538473637
