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ABC Inc. currently has zero debt. Its free cash flow last year was $75,000, and it is a zero growth company.ABC's current WACC is 12.25%,
ABC Inc. currently has zero debt. Its free cash flow last year was $75,000, and it is a zero growth company.ABC's current WACC is 12.25%, and its tax rate is 35%. The firm has 20,000 shares of common stockoutstanding selling at a price per share of $30.61. The company is considering switching to a capitalstructure of 25% debt and 75% equity, which would result in a WACC of 11.10%. What would the new stock price be under the new capital structure?
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