AaabCeDdEe> LA AaBbCcDdEe AaBbCeDdEe AaBbCcDc AaBbCc Aa Bb Cc Dd Ee Aa BbAaBbccD dEe ab x, x Normal No Spacing Heading 2 Styles Pane A A Heading 1 Heading 3 Title Subtitle Subte Emph. The firm makes changes to its operations and capital structure and as a result the rates of return required by investors (buyers of bonds and equity) change You need to calculate the weighted average cost of capital (WACC) in this step of the project Scenario Steps to Completion 6. Calculate the company's weighted average cost of capital (WACC) under the following assumptions provided by Sue The company's long-term bonds (in the new capital structure) currently offer a yield to maturity of 8 percent The company's stock price (in the new capital structure) is $90 per share (P0 $90). The company will pay a dividend of $4.00) per share next year (D1 - The dividend is expected to grow at a constant rate of 6 percent a year (g 6% . The company's capital structure is 75 percent equity and 25 percent debt. The company's income tax rate is 40 percent What is the firm's WACC in this new capital structure? Why do we need to be concerned with the WACC