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Assume Time Warner shares have a market capitalization of $50 billion. The company is expected to pay a dividend of $0.45 per share and each
Assume Time Warner shares have a market capitalization of $50 billion. The company is expected to pay a dividend of $0.45 per share and each share trades for $40. The growth rate in dividends is expected to be 7% per year. Also, Time Warner has $15 billion of debt that trades with a yield to maturity of 9%. If the firm's tax rate is 25%, what is the WACC? A) 8.59% B) 6.64% C) 7.81% D) 7.42%
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Case Studies In Finance
Authors: Robert Bruner, Kenneth Eades, Michael Schill
6th Edition
0073382450, 978-0073382456
