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6. Timmy John's(TJs) is a premium sandwich chain store. It's shares (equity) have a market capitalization of $20 billion. The company is expected to
6. Timmy John's(TJs) is a premium sandwich chain store. It's shares (equity) have a market capitalization of $20 billion. The company is expected to pay a dividend of $1 per share and each share trades for $20. The growth rate in dividends is expected to be 5% per year. Timmy John's has $5 billion of debt. The credit(default) spread for TJs is 2% and the risk-free rate is 2%. If the firm's tax rate is 20%, what is the WACC? [5 points]
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Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
10th edition
978-0077511388, 78034779, 9780077511340, 77511387, 9780078034770, 77511344, 978-0077861759
